KANEL INDUSTIRES 2014 · KANEL INDUSTIRES LIMITED 22ND ANNUAL REPORT 2013-2014 2 NOTICE NOTICE is...

22nd

Annual Report2 0 1 3 - 2 0 1 4

KANEL INDUSTRIES LIMITEDRegd. Office : 203, 2nd Floor, Abhijeet-1, Mithakhali Six Roads,

Ellisbridge, Ahmedabad - 380 006.

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KANEL INDUSTRIES LIMITED

TWENTYSECOND ANNUAL GENERAL MEETING PROGRAMME

DATE : 29TH SEPTMEBER, 2014

DAY : MONDAY

TIME : 10.00 A.M.

VENUE : REGISTERED OFFICE OF THE COMPANY AT203, ABHIJEET – 1, 2ND FLOOR,MITHAKHALI SIX ROADS, ELLISBRIDGE,AHMEDABAD – 380 006.

NOTE TO SHAREHOLDERS :As a measure of economy, copies of the Annual Report will not be distributed at the Annual GeneralMeeting. Shareholders are requested to kindly bring their copies of the meeting.

DISCLAIMER STATEMENT :THIS AUDITED ANNUAL REPORT CONTAINING AUDITED BALANCE SHEET, PROFIT & LOSS ACCOUNT,SCHEDULES, NOTES TO THE ACCOUNTS FOR THE FINANCIAL YEAR ENDED 31/03/2014 AND THEDOCUMENTS ATTACHED THERETO I.E REPORT OF THE AUDITORS, BOARD OF DIRECTORS, REPORTON THE CORPORATE GOVERNANCE AND ANY OTHER ATTACHMENTS ARE PREPARED IN ACCORDANCEWITH THE PROVISIONS OF THE COMPANIES ACT 1956 AS PER GENERAL CIRCULAR 08/2014 ISSUEDVIDE LETTER NO. 1/19/2013-CL-V DATED 04.04.2014 AND APPLICABLE PROVISIONS OF VARIOUSSECTIONS OF COMPANIES ACT 2013 WHICH WERE MADE APPLICABLE W.E.F 12/09/2013.HOWEVERIN PREPARATION OF THIS REPORT AT SOME PLACES A REFERENCE OF VARIOUS SECTIONS OFCOMPANIES ACT 2013 ARE ALSO MADE AS AN ABUNDUNT CAUTION.

CONTENTS ........................................................................................................................ Page No.1. GENERAL INFORMATION ........................................................................................................... 1

2. NOTICE AND EXPLANATORY STATEMENT .............................................................................. 2

3. DIRECTORS’ REPORT .............................................................................................................. 8

4. CORPORATE GOVERNANCE REPORT ................................................................................. 13

5. AUDITORS’ CERTIFICATE ON CORPORATE GOVERNANCE ............................................... 19

6. AUDITORS’ REPORT BALANCE SHEET AND CASH FLOW STATEMENT ............................ 21

7. BALANCE SHEET ..................................................................................................................... 26

8. PROFIT & LOSS ACCOUNT..................................................................................................... 27

9. SCHEDULES & NOTES ON ACCOUNTS ................................................................................ 30

10. CASH FLOW STATEMENT ....................................................................................................... 3911. ATTENDANCE & PROXY FORM

22ND ANNUAL REPORT 2013-2014 KANEL INDUSTIRES LIMITED

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BOARD OF DIRECTORSShri Dhiren K. Thakkar Chairman and Managing DirectorShri Vinodbhai K. Pandya DirectorShri Kiritbhai C. Patel DirectorShri Aditya Y. Patel DirectorShri Yogesh R Patel Director

COMPANY LAW CONSULTANTM/s Kamlesh M. Shah & Co.,Practicing Company Secretaries,

6, Avanika Park, Khanpur, Ahmedabad - 380 001.

BANKERS OF THE COMPANYHDFC Bank Ltd. - Ahmedabad.

The Kalol Nagarik Sahkari Bank Ltd.

STATUTORY AUDITORSShah Dinesh Dahyalal & Associates

Chartered AccountantsAhmedabad.

REGISTRAR FOR DEPOSITORY OPERATIONSSYSTEM SUPPORT SERVICES

209, Shivai Industrial Estate, 89, Andheri - Kurla Road,Sakinaka, Andheri (E), Mumbai - 400 072.

LISTING ATAHMEDABAD MUMBAIAhmedabad Stock Exchange Ltd. Bombay Stock Exchange Ltd.Kamdhenu Complex, Nr. Panjrapole 25th Floor, P.J.Towers,Ambawadi, Ahmedabad-380 015 Dalal Street, Fort, Mumbai-400 001.

CALCUTTA JAIPURCalcutta Stock Exchange Ltd. Jaipur Stock Exchange Ltd.7, Lyon Range, Stock Exchange Building,Calcutta-700 001. JLN Marg, Malviya Nagar, Jaipur-302 017.

REGD. OFFICE203, 2nd Floor, Abhijeet-1, Mithakhali Six Roads, Ellisbridge, Ahmedabad –380 006.

FACTORY & PLANTPlot No. : 213/214, Phase II, GIDC, Naroda, Ahmedabad-382330

INVESTORS GRIEVANCES COMPLIANCE OFFICERDhiren K. Thakkar - Chairman and Managing Director,

203, 2nd Floor, Abhijeet-1. Mithakhali Six Roads, Ellisbridge, Ahmedabad-380 006.Email : [email protected]

KANEL INDUSTIRES LIMITED 22ND ANNUAL REPORT 2013-2014

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NOTICENOTICE is hereby given that the 22ND Annual General Meeting of the Members of the KANEL INDUSTRIESLIMITED will be held on Monday the 29th September, 2014 at 10:00 A.M. at the Registered office of theCompany at 203, Abhijeet-1, 2nd floor, Mithakhali Six Roads, Ellisbridge, Ahmedabad: 380 006 to transact thefollowing business:

ORDINARY BUSINESS:

1) To Receive, Consider, Approve and Adopt the Audited Statement of Accounts i.e. The Audited Balance Sheetas at 31st March,2014 The Profit & Loss Account for the year ended on that date, the report of the Auditorsand Directors thereon.

2) To reappoint a director Mr. Kiritbhai C Patel who retires by rotation and being eligible offers himself forreappointment.

3) To reappoint a director Mr. Yogeshkumar R. Patel who retires by rotation and being eligible offers himselffor reappointment.

4) To Consider and if thought fit to pass with or without modification following Resolution as an ORDINARYRESOLUTION:

RESOLVED THAT pursuant to provisions of Section 139 (1) and other applicable provisions of the CompaniesAct 2013 (Corresponding provisions of Section 224(1B) of the Companies Act 1956) read with Rule 4 and6 of the Companies (Audit and Auditors) Rules 2014 as in force, the consent of the members of the Companybe and is hereby accorded to the Appointment of Shah Dinesh Dahyalal & Associates, a firm of CharteredAccountants (Proprietor firm Registration Number:120362W and CA Member No: 106871) , as Statutory Auditorsof the Company for the next financial years i.e. for the financial years 2014-15 and to fix their remunerationas per section 139(2) of the Companies Act 2013.

SPECIAL BUSINESS:

(5) To Consider and if thought fit to pass with or without modification following Resolution as an ORDINARYRESOLUTION.

To Appoint Mr. Dhiren K Thakkar (DIN 00610001) as Managing Director of the Company for a further periodof 3 years

“RESOLVED THAT in accordance with the provisions of the section 196,197 and 203 read with schedule Vand all the other applicable provisions of the Companies Act 2013 read with Companies (Appointment andRemuneration of Managerial Personnel) Rules, 2014 (including any statutory Modification(s) or re-enactmentthereof for the time being in force, approval of the Company be and is hereby accorded to the appointmentof Mr. Dhiren K Thakkar (Holding Valid DIN: 00610001) as Managing Director of the Company for a furtherperiod of 3 (three) years with effect from 8st October 2014 without taking any managerial remuneration.

“RESOLVED FURTHER THAT Mr. Dhiren K Thakkar, as Managing Director of the Company shall have thesubstantial powers of the Management and administration of the business and affairs of the Company subjectto the overall superintendence, control and direction of the Board of Directors from time to time.

RESOLVED FURTHER THAT the Board be and is hereby authorized to do all acts and take all such stepsas may be necessary, proper or expedient to give effect to this resolution.”

PLACE: AHMEDABAD BY ORDER OF THE BOARD OF DIRECTORSDATE: 31st MAY, 2014 OF KANEL INDUSTRIES LIMITED.

(DHIREN K THAKKAR)CHAIRMAN & MANAGING DIRECTOR

(DIN : 00610001)

The Register of Members of the Company will remain closed from 25/09/2014 TO 29/09/2014 (bothdays inclusive).


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NOTES:

1) A Member of the Company entitled to attend and vote at the meeting is entitled to appoint a proxy to attendand vote and that a proxy need not be a member of the company.

2) Proxies in order to be effective must be received at the Company’s Registered Office not less than 48 hoursbefore the meeting. Proxies submitted on behalf of limited companies, societies, Trusts, etc., must be backedby appropriate resolution / authority as applicable, issued on behalf of the nominating organization.

3) A person can act as proxy on behalf of members not exceeding fifty (50) and holding in the aggregate notmore than ten percent of the total share capital of the Company. A member holding more than ten percentof the total share capital of the Company carrying voting rights may appoint a single person as proxy andsuch person shall not act as a proxy for any other person or shareholder.

4) The Register of members and share transfer books of the Company shall remain closed from 25/09/2014 TO29/09/2014 (Both days inclusive) as per the provisions of section 154 of the Companies Act 1956 and theprovisions of the Clause 16 of the Listing Agreement.

4) The Explanatory Statement pursuant to Section 102 of the Companies Act, 2013, which sets out details relatingto Special Business at the meeting, is annexed hereto.

5) Members desiring any information on accounts are requested to write to the company 7 days before themeeting to enable the management to keep the information ready.

7) Shareholders holding shares in physical form are requested to advise any change of address immediatelyto Company’s Registrar and Share Transfer Agent, System Support Service Shareholders holding shares inelectronic form must advise to their respective depository participants about change in address and not tocompany.

8) All shareholders are requested to dematerialize their shareholding immediately as the shares are tradedcompulsorily in demat segment only.

9) The Securities and Exchange Board of India (SEBI) has mandated the submission of Permanent Account Number(PAN) by every participant in securities market. Members holding shares in electronic form are, therefore,requested to submit the PAN to their Depository Participants with whom they are maintaining their demataccounts. Members holding shares in physical form can submit their PAN details to the Company.

10) All documents referred to in the accompanying Notice and the Explanatory Statement shall be open for inspectionat the Registered Office of the Company during normal business hours (10.00 am to 5.00 pm) on all workingdays except Saturdays, up to and including the date of the Annual General Meeting of the Company.

11) The Notice of the Annual General Meeting and Annual Report of the Company for the year ended 31st March,2014 is uploaded on the Company’s website www.kanel.in and may be accessed by the members.

12) Electronic copy of the Annual Report for 2013-14 is being sent to all the members whose email IDs areregistered with the Company / Depository Participants(s) for communication purposes unless any member hasrequested for a hard copy of the same. For members who have not registered their email address, physicalcopies of the Annual Report for 2013-14 is being sent in the permitted mode.

13) Electronic copy of the Notice of the Annual General Meeting of the Company inter alia indicating the processand manner of e-voting along with Attendance Slip and Proxy Form is being sent to all the members whoseemail IDs are registered with the Company / Depository Participants(s) for communication purposes unlessany member has requested for a hard copy of the same. For members who have not registered their emailaddress, physical copies of the Notice of the Annual General Meeting of the Company inter alia indicatingthe process and manner of e-voting along with Attendance Slip and Proxy Form is being sent in the permittedmode.

14) Instructions for e-voting:In compliance with provisions of Section 108 of the Companies Act, 2013 and Rule 20 of the Companies(Management and Administration) Rules, 2014 read with clause 35B of the Listing Agreement, the Companyis pleased to provide members facility to exercise their right to vote at the 22nd Annual General Meeting (AGM)by electronic means and the business may be transacted through e-Voting Services provided by CentralDepository Services (India) Limited (CDSL):


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In case of members receiving e-mail:

(i) Log on to the e-voting website www.evotingindia.com

(ii) Click on “Shareholders” tab.

(iii) Now, select the “COMPANY NAME” i.e. KANEL INDUSTRIES LIMITED from the drop down menu and clickon “SUBMIT”

(iv) Now Enter your User ID:

a. For CDSL: 16 digits beneficiary ID,

b. For NSDL: 8 Character DP ID followed by 8 Digits Client ID,

c. Members holding shares in Physical Form should enter Folio Number registered with the Company.(6 Digit Alpha-Numeric)

(v) Next enter the Image Verification as displayed and Click on Login.

(vi) If you are holding shares in demat form and had logged on to www.evotingindia.com and voted on an earliervoting of any company, then your existing password is to be used.

(vii) If you are a first time user follow the steps given below:

For Members holding shares in Demat Form and Physical Form

PAN* Enter your 10 digit alpha-numeric *PAN issued by Income Tax Department (Applicable for both dematshareholders as well as physical shareholders)

Members who have not updated their PAN with the Company/Depository Participant are requestedto use the first two letters of their name and the last 8 digits of the demat account/folio numberin the PAN field.

In case the folio number is less than 8 digits enter the applicable number of 0’s before thenumber after the first two characters of the name in CAPITAL letters. E.g. If your name isRamesh Kumar with folio number 100 then enter RA00000100 in the PAN Field.

DOB Enter the Date of Birth as recorded in your demat account or in the company records for the saiddemat account or folio in dd/mm/yyyy format.

Dividend Enter the Dividend Bank Details as recorded in your demat account or in the company recordsBank the said demat account or folio.Detailsfor Please enter the DOB or Dividend Bank Details in order to login. If the details are not

recorded with the depository or company please enter the number of shares held by youas on the cut-off date in the Dividend Bank details field.

(viii) After entering these details appropriately, click on “SUBMIT” tab.

(ix) Members holding shares in physical form will then reach directly the Company selection screen. However,members holding shares in demat form will now reach ‘Password Creation’ menu wherein they are requiredto mandatorily enter their login password in the new password field. Kindly note that this password is tobe also used by the demat holders for voting for resolutions of any other company on which they are eligibleto vote, provided that company opts for e-voting through CDSL platform. It is strongly recommended not toshare your password with any other person and take utmost care to keep your password confidential.

(x) For Members holding shares in physical form, the details can be used only for e-voting on the resolutionscontained in this Notice.

(xi) Click on the EVSN for the relevant <Company Name> i.e. The KANEL INDUSTRIES LIMITED, on which youchoose to vote.

(xii) On the voting page, you will see “RESOLUTION DESCRIPTION” and against the same the option “YES/NO”for voting. Select the option YES or NO as desired. The option YES implies that you assent to the Resolutionand option NO implies that you dissent to the Resolution.

(xiii) Click on the “RESOLUTIONS FILE LINK” if you wish to view the entire Resolution details.


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(xiv) After selecting the resolution you have decided to vote on, click on “SUBMIT”. A confirmation box will bedisplayed. If you wish to confirm your vote, click on “OK”, else to change your vote, click on “CANCEL”and accordingly modify your vote.

(xv) Once you “CONFIRM” your vote on the resolution, you will not be allowed to modify your vote.

(xvi) You can also take out print of the voting done by you by clicking on “Click here to print” option on theVoting page.

(xvii) If Demat account holder has forgotten the changed password then enter the User ID and the image verificationcode and click on Forgot Password & enter the details as prompted by the system.

· Institutional shareholders (i.e. other than Individuals, HUF, NRI etc.) are required to log on to https://www.evotingindia.co.in and register themselves as Corporate.

· They should submit a scanned copy of the Registration Form bearing the stamp and sign of the entity [email protected].

· After receiving the login details they have to create a user who would be able to link the account(s) whichthey wish to vote on.

· The list of accounts should be mailed to [email protected] and on approval of the accountsthey would be able to cast their vote.

· They should upload a scanned copy of the Board Resolution and Power of Attorney (POA) which they haveissued in favor of the Custodian, if any, in PDF format in the system for the scrutinizer to verify the same.

In case of members receiving the physical copy:

Please follow all steps from sr. no. (i) to sr. no. (xvii) above to cast vote.

General Instructions:

a. The voting period begins on 26th September 2014 at 9.00 a.m. and ends on 26th September, 2014at 6.00 p.m. During this period shareholders’ of the Company, holding shares either in physical formor in dematerialized form, as on the cut-off date of (record date) of 20th August 2014, may cast theirvote electronically. The e-voting module shall be disabled by CDSL for voting thereafter. The EVSNNumber for e-voting generated on the website www.evotingindia.com is 140728017.

b. In case you have any queries or issues regarding e-voting, you may refer the Frequently Asked Questions(“FAQs”) and e-voting manual available at www.evotingindia.co.in under help section or write an email [email protected].

c. Mr. Kamlesh M. Shah, Practicing Company Secretary, (Membership No. A8356 and COP No. 2072) (Address:801-A, Mahalay Complex, Opp: Hotel President, B/h. Fairdeal House, Swastik Cross Roads, Navrangpura,Ahmedabad: 380 009, Gujarat, India, has been appointed as the Scrutinizer to scrutinize the e-voting processin a fair and transparent manner.

d. The Scrutinizer shall within a period not exceeding three (3) working days from the conclusion of the e-votingperiod unblock the votes in the presence of at least two (2) witnesses not in the employment of the Companyand make a Scrutinizer’s Report of the votes cast in favor or against, if any, forthwith to the Chairman ofthe Company.

e. The Results declared along with the Scrutinizer’s Report shall be placed on the Company’s website www.kanel.inand on the website of CDSL within two(2) days of passing of the resolutions at the AGM of the Companyand communicated to the ASE and BSE Limited.


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INFORMATION ABOUT THE DIRECTORS WHO ARE PROPOSED TO BE APPOINTED/ RE-APPOINTED AT THE22nd ANNUAL GENERAL MEETING AS PER CLAUSE 49 OF THE LISTING AGREEMENT FORMING PART OFTHE NOTICE CONVENING THE ANNUAL GENERAL MEETING OF THE COMPANY.

Particulars Mr. Kiritkumar C PatelDirector Identification Number. 00048004Date of Birth. 18/08/1945Age. 69 years oldEducational Qualification. B.ComExperience (No. of Years) 30 years

Business field in which Experience. He has vast experience in Business Constru-ction.He is providing the service of Non ExecutiveDirector in many other Companies.

Date of Appointment as Director in the Company. 16/04/2012Directorship held in any other Company. Kadam Exports Private LimitedMember of any Committees of the Directors in Audit Committeethe Company.Member of any committees of the Directors in otherCompanies with names of the Company. N.A.Member of any Trade Association/ Charitable N.A.

Organization/NGOs etc.Particulars Mr. Dhiren K ThakkarDirector Identification Number. 00610001Date of Birth. 26/06/1972Age. 42 years oldEducational Qualification. B.ScExperience (No. of Years) 15 years

Business field in which Experience. He has vast experience in Business of Trading ofAgro production and Edible Oil.He is looking after the business since last 20years. He has the experience of 15 years in thisfield of trading of agro Commodities as well asmarketing and trading of Edible Oil.

Date of Appointment as Director in the Company. 06/06/1994Directorship held in any other Company. Dharti Protein Limited

T J R Sons LimitedShakti Nutraceuticals Private Limited

Member of any Committees of the Directors in the Audit CommitteeCompany

Member of any committees of the Directors in other N.A.Companies with names of the Company.Member of any Trade Association/ Charitable N.A.Organization/NGOs etc.Particulars Mr. Yogeshkumar R PatelDirector Identification Number. 05260810Date of Birth. 04/07/1967Age. 47 years oldEducational Qualification. GraduateExperience (No. of Years) 15 yearsBusiness field in which Experience. He has vast experience in Business of Trading of Agro

production and as well as in construction field.Date of Appointment as Director in the Company. 16/04/2012Directorship held in any other Company. N.A.Member of any Committees of the Directors in the Company. Audit CommitteeMember of any committees of the Directors inother Companies with names of the Company. N.A.Member of any Trade Association/ CharitableOrganization/ NGOs etc. N.A.


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ANNEXURE TO NOTICE CONVENING OF THE 22ND ANNUAL GENERAL MEETING OFKANEL INDUSTRIES SLIMITED

STATEMENT PURSUANT TO SECTION 102 OF THE COMPANIES ACT, 2013(Corresponding Section 173(2) of the Companies Act 1956)

The following statement sets out all material facts relating to the Special Business mentioned in the accompanyingNotice:REAPOINTMENT OF MR. DHIREN K THAKKAR (DIRECTOR IDENTIFICATION NUMBER: 00610001) AS THEMANAGING DIRECTOR OF THE COMPANY FOR A FURTHER PERIOD OF 3 YEARS.Mr. Dhiren K Thakkar (Holding a valid Director Identification Number: 00610001) is currently also a Managing Directorof the Company. His previous term of office as Managing Director of the Company comes to expire on 8th October,2013. He is due for reappointment as the Managing Director for another term.As per provisions of section 196 of the Companies Act 2013 (Read with the relevant rules of the companies (Appointmentand Remuneration of Managerial Personnel) Rules 2014 read with schedule V of the Companies Act 2013 requiresevery public Company having paid share capital of Rs.5 Crores or more and every listed companies, to have aManaging Director or Whole Time Director or a Manager.Accordingly, as the Company’s current paid up share capital of the Company is Rs.184,124,400, it is compulsorilyrequired to have a full time Managing Director within the company. Mr. Dhiren K Thakkar, is working as ManagingDirector of the Company Since last 5 Years. His working is satisfactory and he is discharging his duties as themanaging director within time. Under his leadership, the company is making all legal and procedural compliancesof stock exchanges, Registrar of Companies, Income Tax, Sales Tax and other corporate laws in time. Mr. DhirenK Thakkar is also taking due care in the Management of the business of the Company. Currently he is activelyinvolved in the implementation of the company’s Edible Oil project. In fact, with his active involvement in all thelegal cases, now the company has started to manufacture the Edible Oil.Considering the current financial position and economic conditions of the country, inflationary trends, the financialposition of the company, the projects being undertaken by the company, Mr. Dhiren K Thakkar will not take anyManagerial Remuneration from the Company.Directors recommend to pass necessary resolution for his reappointment as the Managing Director of the Companywithout any managerial Remuneration.Except the above disclosure of the nature of interest, no other directors of the company or any of their relativeshave either director or indirect interest or concern in the proposed resolution.Statutory Information as per requirement of Part – II of Schedule V of Companies Act, 2013I. General Information

1) Nature of Industry : Trading of Edible Oil2) In case of new companies, expected date of commencement of activities as per project approved by

financial institutions appearing in the prospectus.The company is already earning from Trading of Edible Oil.

3) Financial performance based on given indicators Company has income from operations of Rs. 86215954.00.4) Foreign investment or collaborations, if any: There is no foreign investment or collaborations.

II. Information about the appointee:1) Background details : Mr Dhiren K Thakkar is appointed is Director on 08/10/2013 has served as Non

Executive Managing Director as five Years and appointed as Managing Director for the further periodof Three year.

2) Past remuneration : N.A.3) Recognition or awards : N.A.4) Job profile and his suitability: Mr. Dhiren K Thakkar is looking after day to day business and affairs

of the company. His rich experience of 15 years in the management of the business and affairs ofthe company and project implementation work will benefit the company in the long run.

5) Remuneration proposed : No Remuneration due to weak financials of the company.6) Comparative remuneration profile with respect to industry, size of the company, profile of the position and

person (in case of expatriates the relevant details would be with respect to the country of his origin) :The company’s paid up capital is of Rs. 18412440/-. He is eligible for remuneration up to Rs. 42 lacsper annum as per part A of section II of Part II of Schedule V of the Companies Act, 2013. Howeverlooking to company’s financial performance the board has approved and proposed not to make any paymentof managerial remuneration at present instead of his eligible limit. The company’s current financial positionand status is not comparable with industries norms.

7) Pecuniary relationship directly or indirectly with the company, or relationship with the managerial personnel,if any. : N.A.

III. Other information1) Reasons of loss: Due to unavailability of sufficient working capital in the company2) Steps taken or proposed to be taken for improvement: Steps are being taken to restart the manufacturing

activity at the company’s Naroda unit by promoters by bringing in funds for working capital.IV. Disclosures

Except the above disclosure of the nature of interest, no other directors of the company or any of their relativeshave either director or indirect interest or concern in the proposed resolution.



(DIN : 00610001)


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DIRECTORS’ REPORT

Your Directors are pleased to submit herewith their report together with the audited statement of accounts for the22ND financial year ended 31st March, 2014.

[Amount in Rs.]

PARTICULARS 2013-14 2012-13Income from Operation 86215954.00 NILOther Income 290252.00 1698293.00Increase/ (Decrease) in stock NIL NILTotal Income 86506206.00 1698293.00Total Expenditure 88687758.00 5173589.00Profit/ (Loss) before Tax (2181552.00) (3475296.00)Provision for Tax NIL NILTaxws for Earlier periods NIL NILPrior Period Extra Ordinary Items (Net) NIL NILNet Profit / (Loss) after Tax (2181552.00) (3475296.00)Previous Year Debit Balance (416952314.00) (413477018.00)Balance Carried to B/S (419133866.00) (416952314.00)

DIVIDEND:As your company has incur loss during the year under review and due to the accumulated losses your directorsregret for their inability to declare any amount as dividend to be paid.TRANSFER OF UNPAID / UNCLAIMED DIVIDEND:Your company’s all the 4 previous years i.e. dividends declared in year 1995, 1996, 1997 and 1998 are due fortransfer thereof to investors’ education and protection fund as per the provision of the section 205c of the companiesact 1956. However due to huge accumulated losses since the company could not meet its liabilities towards itsbankers in time, the bankers are not co operating and so company will make representation of this fact to Registrarof the companies, Securities and exchange board of India. At the highest authorities of bankers, Reserve bank ofIndia. In this situation the audit of the unclaimed unpaid dividend accounts could not be conducted and completed.The company had received more than 2000 investor complaints for non payment of dividend or not revalidation ofthe dividend warrants of the investors. However due to non co operation of the bankers, the company could notresolve such complaints. Even the company’s efforts to surrender of the original dividend warrants and in lieu ofsuch dividend warrants requests for issue of demand draft in favor of investor concerned are not accepted by thebankers. In view of the above stated reasons the company could not make compliance with the provision of section205c of the companies act 1956.Company however has almost solved most of the complaints related to non receiptof dividend warrants.SHARE CAPITAL STRUCTURE:During the year under review there were no changes in the Authorized, Issued, Subscribed and Paid up Share CapitalStructure of the Company.BUY BACK OF EQUITY SHARES:The Company had not made any Buy Back of its paid up equity shares during the year in terms of section 77A,77AA and 77B of the Companies Act 1956. Hence no specific disclosure is required to be made in this reportYEAR UNDER REVIEW:During the year under review the Company has made total loss of Rs.21,80,916/- (Previous Year of Rs. 34,75,296/-)from business.DEMATERIALISATION OF SECURITIES:Your Company’s Equity shares are admitted in the System of Dematerialization by both the Depositories namelyNSDL and CDSL. The Company has signed tripartite Agreement through Registrar and Share Transfer Agent SystemSupport Service. The Investors are advised to take advantage of timely dematerialization of their securities. The ISINallotted to your Company is INE 248C01013.Total Share dematerialized up to 31st March 2014 were 11380604 whichconstitute 61.81% of total capital. Your Directors request all the shareholders to dematerialize their shareholdingin the company as early as possible.COMPLIANCE TO CODE OF CORPORATE GOVERNANCE:The Complete Report on Corporate Governance is given as ANNEXURE-A to this report.


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MANAGEMENT’S DISCUSSION AND ANALYSISManagement’s discussion and perceptions on existing business, future out look of the industry, future expansionand diversification plans of the Company and future course of action for the development of the Company are fullyexplained in a separate para in Corporate Governance Report.DEPOSITSDuring the year under review your company has neither invited nor accepted any public deposit as defined underSection 58A of the Companies Act-1956.DIRECTORSMr. Kiritbhai C Patel and Mr. Yogeshkumar R. Patel shall retire by rotation at the ensuing Annual General Meetingas per provisions of Law. He eligible for reappointment and have offered themselves for directorship of the company.Your directors recommend for their reappointment.MANAGING DIRECTORMr. Dhiren K Thakkar, the Managing Director is due for reappointment as Managing Director for a further periodof 3 years. The Remuneration Committee and the Board of Directors of the Company has approved his appointmentas Managing Director for a further period of 3 years w.e.f. 8th October 2013 without any managerial Remuneration.An Ordinary Resolution is required to be passed for approval of his reappointment for the next 3 years. Your directorsrecommend to pass necessary resolution as mentioned in the notice for the Annual General Meeting.DISCLOUSER AS PER COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL)RULE, 2014i) The ratio of the remuneration of each director to the median remuneration of the employees of the company

for the financial year:Total Remuneration expenses: Rs. 216,000/-Managerial Remuneration Expenses: Rs. Nil/-Other employees Remuneration: Rs. 216,000/-

ii) The percentage increase in remuneration of each director, Chief Financial Officer, Chief Executive Officer, CompanySecretary or Manager, if any in the financial year:No remuneration is increased during the year for any of the Key Managerial Personnel, CFO, CEO, CS orManager.

iii) The percentage increase in the median remuneration of employees in the financial yearDuring the year there was no increase in remuneration of any employees during the financial year.

iv) The number of permanent employees on the rolls of company; 1 (One)** However there are several other employees who are contractual and not permanent.

v) The explanation on the relationship between average increase in remuneration and company performance; NOTAPPLICABLE as there was no increase in remuneration of any employee during the year.

vi) Comparison of the remuneration of the Key managerial personnel against the performance of the company;The KMP i.e. Managing Director is not paid any managerial Remuneration. Hence, his remuneration is notcomparable inter company, intra company or inter industry as a whole.

vii) Variations in the market capitalization of the company, price earnings ratio as at the closing date of the currentfinancial year and previous financial year and percentage increase over decrease in the market quotationsof the shares of the company in comparison to the rate at which the company came out with the last publicoffer in case of listed companies, and in case of unlisted companies, the variations in the net worth of thecompany as at the close of the current financial year and previous financial year;Closing Market Price of shares of Company as on 31/03/2013 : Rs.4.08/-Closing Market Price of shares of Company as on 31/03/2014 : Rs.14.25/-

viii) Average percentile increase made in the salaries of employees other than the managerial personnel in thelast financial year and its comparison with the percentile increase in the managerial remuneration and justificationthereof and point out if there are any exceptional circumstances for increase in the managerial remuneration;NOT APPLICABLE as there was no increase in Remuneration of any employees of the company or the ManagerialPersonnel of the Company.

ix) Comparison of the each remuneration of the key managerial personnel against the performance of the company;Not Comparable.

x) The key parameters for any variable component of remuneration availed by the directors;


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NOT APPLICABLE.xi) The ratio of the remuneration of the highest paid director to the of the employees who are not directors but

receive remuneration in excess of the highest paid director during the year; and No employee is receivingremuneration in excess or higher than the remuneration of Director or Key Managerial Personnel.

xii) Affirmation that the remuneration is as per the remuneration policy of the company.All remuneration of the Employees and directors are decided by Nomination & Remuneration Committee andby the Board of Directors within the organization.

Directors’ Responsibility STATEMENTPursuant to the provision contained in Section 134(5) of the Companies Act 2013 (Corresponding Section 217(2AA)of the Companies Act, 1956), the Directors of your Company confirm:A. That in the preparation of the annual accounts, as far as possible and except the Accounting Standards which

are mentioned by the Auditors in their Report and the Notes to the Accounts separately, the applicable accountingstandards has been followed and no material departure has been made from the same;

B. That they have selected such accounting policies and applied them consistently and made judgments andestimates that are reasonable and prudent so as to give a true and fair view of the state of affair of theCompany at the end of the financial year and of the profit or loss of the Company for that period;

C. That they have taken proper and sufficient care for the maintenance of adequate accounting records in accordancewith the provisions of this Act for safeguarding the assets of the Company for preventing and detecting fraudand other irregularities;

D. That they have prepared the annual accounts on a going concern basis.E. The Directors, in the case of Listed Company, had laid down internal financial controls to be followed by

the company and that such internal financial controls are adequate and were operative effectively.F. The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws

and that such systems were adequate and operating effectively.DECLARATION AS TO INDEPENDENT DIRECTORS: (Pursuant to Provisions of section 149(6) OF the CompaniesAct 2013).All the Independent Directors of the Company do hereby declare that:(1) All the Independent Directors of the Company are neither Managing Director, nor a Whole Time Director nor

a Manager or a Nominee Director.(2) All the Independent Directors in the opinion of the Board, are persons of integrity and possesses relevant

expertise and experience.(3) Who are or were not a Promoter of the Company or its Holding or subsidiary or associate company.(4) Who are or were not related to promoters or directors in the company, its holding, subsidiary or associate

company.(5) Who has or had no pecuniary relationship with the company, its holding, subsidiary or associate company

or their promoters or directors, during the two immediately preceding financial years or during the current financialyear.

(6) None of whose relatives has or had pecuniary relationship or transaction with the company, its holding, subsidiary,or associate company, or their promoters, or directors, amounting to two per cent or more of its gross turnoveror total income or fifty lacs rupees or such higher amount as may be prescribed, whichever is lower, duringthe two immediately preceding financial years or during the current financial year,

(7) Who neither himself, nor any of his relatives,(a) Holds or has held the position of a key managerial personnel or is or has been employee of the company

or its holding, subsidiary or associate company in any of three financial years immediately precedingthe financial year in which i\he is proposed to be appointed.

(b) Is or has been an employee or proprietor or a partner, in any of the three financial years immediatelypreceding the financial years in which he is proposed to be appointed of(i) A firm of auditors or company secretaries in practice or cost auditors of the company or its holding,

subsidiary or associate company; OR(ii) Any legal or a consulting firm that has or had any transaction with the company, its holding,

subsidiary or associate company amounting to ten per cent, or more of the gross turnover ofsuch firm;

(iii) Holds together with his relatives two per cent, or more of the total voting power of the company;OR


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(iv) Is a Chief Executive or director, by whatever name called, or any non-profit organization that receivestwenty five per cent or more of its receipts from the Company, any of its promoters, directorsor its holding, subsidiary or associate company or that holds two per cent or more of the totalvoting power of the company; OR

(v) Who possesses such other qualifications as may be prescribed.STATUTORY AUDITORSShah Dinesh Dahyalal & Associates, Present Statutory Auditors of the company have given their letter of consentand confirmation under section 141(1) the Companies Act 1956 for reappointment as Statutory Auditors of the Company.The Board has now proposed to appoint the Statutory Auditors for a period of 1 year as per requirements of section139 (1) of the Companies Act 2013 read with Companies (Audit and Auditors) Rules 2014. Necessary Resolutionfor their appointment as the Statutory Auditors and fixing their remuneration is proposed to be passed at the AnnualGeneral Meeting.

INTERNAL AUDITORSThe company is in process of appointing an independent Chartered Accountant to act as an Internal Auditor asper suggestion of auditors in order to strengthen the internal control system for the Company.

AUDITORS OBSERVATIONThe notes to the accounts of the company are self explanatory. However and clarification from the board of directorson the specific observation made by the Auditors in their report are as under”

1) PREPARTION OF ACCOUNTS ON GOING CONCERN BASIS:The auditors of the company are of the opinion that due to huge accumulated losses and complete erosionof the net worth the company, the accounts of the company is not advised to be written on a going concernbasis. But as the company has now settled all its working capital dues of banks in the year 2009-10 andis in process to submit a proper draft rehabilitation scheme in order to restart the production at its Narodaunit after required capital expenditure and the management is hopeful for the revival of the company in nearfuture, hence the company have been written books of account ongoing concern basis.

2) CONFIRMATION OF ACCOUNTS PENDING:The company has established the system of obtaining conformation of accounts from various parties. Thefinancial transactions are numerous. Certain confirmations are pending including statement of secured Loanreceived from Adani Enterprise Limited. However the auditors have obtained all the information and explanationsup to their best knowledge and behalf as were necessary for their purpose of their audit, except certain nonreceipt of conformation of balances in respect of loans and advances, deposits and creditors and form banksand financial institutions. This in fact does not affect financial statements.

3) NON OPERATIONAL NARODA PLANT:The Naroda plant has been non operational since last many years due to lack of working capital and someminor changes in technology and other reasons. However the company has received proposals from one bigindustrial house to take the plant on lease/ rental basis for manufacture of Castor oil as well as the companyis in process to prepare the draft rehabilitation scheme by which the company will restart the production atits Naroda unit henceforth after required capital expenditure. The proposals are under active consideration andif upon finalization it will not only add the revenue to the company but also recondition the plant., its life,its value, upgrade certain technology, replace certain parts etc. Hence the market value of old plant & machineriescould be on lower side, the market value of land and building will offset the losses, so it is the view ofthe management to show the plant and machinery at a part of fixed assets in the balance sheet and notto written off the assets.

4) NON PROVISION OF SALES TAX LIABILITIES:The company has made a review application for assessment order under the Sales Tax act. The companyis hopeful of remedial favorable assessment orders. Once the liabilities are crystallized, it will make necessaryarrangement for its payment and make necessary provision in the books of account.

5) INTEREST FREE LOANS AND ADVANCES:The Company had given certain loans and advances to number of parties as interest free looking to the thenprevailing business interests of the Company. The Company has been receiving good business orders fromsome of such parties still to date. So it is provided to such parties’ interest free and upon such terms andconditions as decided by both the parties. The Management is trying to recover the same either in cashor in kind and is doing the business with these parties. Other amount has been received by the companyagainst cash or in kind. Hence no provisions as Bad loans and advances have been made. The companyis hopeful for its recovery of its outstanding amount and it is trying commercially to recover the loan.


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6) NON COMPLIANCE WITH THE ACCOUNTING STANDARD FOR TAXATION AS 22:As per Accounting Standard 22 the company is required to create Deferred Tax Liability / Assets each year.However the management is of the opinion that due to huge accumulated losses and until the formal planfor revival / rehabilitation is sanctioned, it is not considered prudent polity to create Deferred Tax liabilities/ Assets.

7) TRANSFER OF UNPAID / UNCLAIMED DIVIDEND TO INVESTORS’ EDUCATION AND PROTECTION FUNDS:This has been fully explained separately in this report elsewhere under relevant Para.

8) NON PAYMENT OF CERTAIN DUES:As the company is a sick unit and it has not enough funds with it so it has defaulted in depositing statutorydues towards Income Tax deducted at source, Professional Tax, Sales Tax, Income Tax and municipal Tax,However dues of provident fund have been cleared, certain municipal tax paid off and the company is graduallysettling the old dues. At the same time the company as soon as it recovers any amount or any surplushas decided to give top priority to these dues.

9) BANK STATEMENT OF NO LIEN ACCOUNT:Company had deposited Rs. 89.30 lacs as per BIFR directive in the No Lien A/C with the 4 consortium Banks.This amount was meant for rehabilitation of the Company. However in spite of the numerous communicationby auditors of the Company with the Banks for providing stake of money deposited along with statements,the Banks have not responded. In absence of the response from bank, the Company has been helpless andunable to reconcile these no lien accounts.Formation of Audit Committee in Compliance to Section 292 A of the Companies Act, 1956 AND CLAUSE49 OF THE LISTING AGREEMENT ON CORPORATE GOVERNANCE:

In Compliance with the provisions of Section 292A of the Companies Act 1956 your company has formedan Audit Committee within the Organization consisting of 3 independent directors. An Internal Auditors havebeen appointed as Advisors in their professional capacity on this committee. The area of operations and functionalresponsibilities assigned to the committee are as per the guidelines provided in Clause 49 of the Listing Agreementfor implementation of code of corporate governance. The Committee meets at least once in a quarter andgives its report of each meeting to the Board for its approval, record and information purposes. The detailof powers, responsibilities and system of functioning of this committee is given in report on Corporate Governanceforming part of this report.

EMPLOYEESThere are no employees of the company who were in receipt of the remuneration of Rs.24,00,000/- annually in theAggregate if employed for the year and in receipt of the Monthly remuneration of Rs. 2,00,000/- in the aggregateif employed for a part of the year under review. Hence the information required under Section 217 (2A) of the CompaniesAct, 1956 being not applicable and hence not given in this report.STATUTORY INFORMATIONThe Information required to be disclosed in the report of the Board of Directors as per the provisions of Section217 (1) (e) of the Companies Act-1956 and the Companies (Disclosure of Particulars in the Report of Board ofDirectors) Rules 1988 regarding the conservation of energy, technology absorption, foreign exchange earnings andoutgo are not applicable to the company hence are not given herewith. There were no foreign Exchange earningsor outgo during the year.

MATERIAL CHANGESExcept the information given in this report, no material changes have taken place after completion of the financialyear up to the date of this report which may have substantial effect on business and finances of the company.APPRECIATIONYour Directors take this opportunity to acknowledge the trust reposed in your company by its Shareholders, Bankersand clients. Your Directors also keenly appreciate the dedication & commitment of all our employees, without whichthe continuing progress of the company would not have been possible.



(DIN : 00610001)


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REPORT ON CORPORATE GOVERNANCE 2013-14Company’s Philosophy on Code of Corporate GovernanceThe Corporate Governance policies followed by your Company are aimed at ensuring transparency in all dealingsand in the functioning of the management and the Board. These policies seek to focus on enhancement of longterm shareholder value without compromising on integrity, social obligations and regulatory compliances. The Companyoperates within accepted standards of propriety, fair play and justice and aims at creating a culture of opennessin relationship between itself and its stake – holders.

Board of Directors:

As on 31st March 2014, the composition of the Board of Directors is shown as below. The Chairman is a non-executive Director and hence the composition of Independent Director is more than 50% comprising of non-executiveindependent directors.

BOARD MEETINGS:During the year under review, 5 Board Meetings were held on 1st May, 2013, 30th July, 2013, 2nd September,2013; 28th September, 2013; 28th October, 2013; 22nd January, 2014The details of the attendance of the directorsin the board meeting along with number of meeting held during their tenure are given below.

Name & Designation Category No. of Attendance No. of Membership in theBoard at Last Other committee of

Meeting AGM Director- other companiesAttended (28/09/2013) ship Member- Chair-

ship manshipDhiren K ThakkarChairman & MD Promoter Director 5 Yes 3 2 Nil

Kiritbhai C Patel Director 3 Yes 2 Nil Nil

Aditya Y Patel Director 5 Yes 0 Nil Nil

Vinodchandra Pandya Director 3 Yes 3 Nil 2

Yogesh R Patel Director 4 Yes 0 Nil Nil

COMPOSITION OF COMMITTEES :A. Audit Committee: Brief description of the terms of reference for a qualified and independent audit committee

has been set up by the board. The terms of reference of the Audit Committee include;

a. Review of quarterly and half yearly financial results with the management and the statutory auditors;

b. Review with the management and statutory auditors of the annual financial statements before submissionto the Board;

c. Review with the management, statutory auditors and the internal auditors about the nature and scopeof audits and of the adequacy of internal control system;

d. Consideration of the reports of the internal auditors and discussion about their findings with the managementand suggesting corrective actions wherever necessary;

e. Review of the financial report process and disclosure of financial information;

f. Review of the adequacy of the internal audit function;

g. Look into the reasons for any substantial defaults in payments to the depositors, shareholders, creditors,if any;

h. Recommending the appointment and removal of External Auditors, fixation of audit fees and approvalfor payment for any other services;

i. Authority to investigate into any matter covered by section 292A of the Company Act, 1956;

j. Reviewing the Company’s financial and risk management policies;


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COMPOSITION, NAME OF MEMBERS AND CHAIRMAN :

No. Name Type1. Mr. Vinodchandra K Pandya Chairman2. Mr. Kiritbhai C Patel Member3. Mr. Aditya Y Patel Member4. Mr. Dhiren K Thakkar Member5. Mr. Yogeshbhai R Patel Member

FUNCTIONS OF AUDIT COMMITTEE :The Audit Committee is headed by Mr. Vinodchandra K Pandya as Chairman and includes other directorsnamely Mr. Kiritbhai C Patel, Mr. Aditya Y Patel, Mr. Dhiren K Thakkar, Mr. Yogeshbhai R Patel. The Committeeis regularly giving feed back on daily financial and accounting position of the company to the Board. TheCommittee meets at least once in every quarter and prepare its minutes on the proceedings and businessdiscussed, transacted. All committee Reports and minutes are placed before the Board in all its meetingsfor information, guidance, directions and taking the same on record. Other functions, powers, duties etc. ofthe committee are defined taking in to account the legal provisions of the Listing Agreement and the sameare kept flexible to be decided by the Board from time to time.

B. INVESTOR GRIEVANCE COMMITTEE :

No. Name Designation1. Mr. Vinodchandra Pandya Chairman2. Mr. Aditya Y Patel Member3. Mr. Yogesh R Patel Member

FUNCTIONS OF INVESTORS SERVICE COMMITTEE :This Committee looks in to all aspects and business related to shares and retail investors. The Committeealso looks after the Dematerialization process of equity shares.

The Committee is also empowered to keep complete records of Shareholders, Statutory Registers relatingto Shares and securities, maintaining of the complete records of Share Demated, Investors Grievances, complaintsreceived from investors and also from various agencies.

The Committee has also appointed Mr. Kamlesh. M. Shah Company secretary to look after the legal casesand problems relating to the investors, shares etc.

The Committee meets every month to approve all the cases of shares demate, transfer, issue of duplicateand resolution of investors complaints, submission of information to various statutory authorities like NSDL/CDSL, SEBI, Stock Exchanges, Registrar of Companies periodically and from time to time.

Other functions, roles, duties, powers etc. have been clearly defined in line with the Clause 49 of the ListingAgreement and are kept flexible for modification by the Board from time to time.

C. REMUNERATION COMMITTEE :The Company has only one Managing Director Mr. Dhiren K Thakkar. He was not withdrawing any ManagerialRemuneration from the Company. However, now the Company has framed within the company a RemunerationCommittee which is the same as the Audit Committee. There was only one meeting held during the yearof the remuneration committee on 31st May, 2014. The Committee had reviewed the proposal for re-appointmentof Mr. Dhiren K Thakkar as Managing Director of the Company for a further period of 3 years. The Committee,had after considering the financial position of the company, the current economic conditions of the country,inflationary trends, the past performance of Mr. Dhiren K Thakkar as Managing Director, and all other relevantparameters, had recommended for his re-appointment as Managing Director for a further period of 3 yearswithout any managerial remuneration. The Board has recommended to pass necessary resolution at the GeneralMeeting in this regard by the members.

During the year the Company has not offered any Stock Options or provided any finance to purchase anysuch stock options or offered ESOP Scheme to any of its Directors or the employees.


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Number of Board and Committees Meetings Held During the Year :

NAME OF COMMITTEE NO. OF Dates of Board Meeting/MEETING HELD Committee Meetings

Board 5 1st May, 2013, 30th July, 20132nd September, 2013; 28th September, 2013;28th October, 2013; 22nd January, 2014

Audit Committee of Board 4 1st May, 2013, 30th July, 201328th October, 2013; 22nd January, 2014

Investors Grievance Committee 12 27th April, 2013; 21st May, 2013;29th June, 2013; 25th July, 2013;28th August, 2013; 26th September, 2013;30th October, 2013; 29th November, 2013;27th December, 2013; 22nd January, 2014;26th February, 2014; 20th March, 2014

ATTENDANCE OF THE DIRECTORS IN VARIOUS MEETINGS :

S.No. Name of Director Board Meeting ACB Meeting IGCB Meeting1 Mr. Dhiren K Thakkar 5 4 122 Mr. Vinodchandra K Pandya 3 4 -3 Mr. Aditya Y Patel 5 0 104 Mr. Kiritbhai C Patel 3 2 -5 Mr. Yogeshbhai R Patel 4 4 9

Details of Annual General Meeting Held During the Last 4 Financial Years :

S.No. Date of AGM Day Time Venue1 30/09/2010 Thursday 11.00AM 203, 2nd floor, Abhijeet-1, Nr. Mithakhali Six Roads,

Ellisbridge, Ahmedabad- 380 0062 30/09/2011 Friday 10.00AM 203, 2nd floor, Abhijeet-1, Nr. Mithakhali Six Roads,

Ellisbridge, Ahmedabad- 380 0063 29/09/2012 Saturday 10.00AM 203, 2nd floor, Abhijeet-1, Nr. Mithakhali Six Roads,

Ellisbridge, Ahmedabad- 380 0064 28/09/2013 Saturday 10.00AM 203, 2nd floor, Abhijeet-1, Nr. Mithakhali Six Roads,

Ellisbridge, Ahmedabad- 380 006

PASSING OF THE RESOLUTION BY POSTAL BALLOT SYSTEM:The Company had not passed any resolution by means of Postal Ballot since the last Annual General Meeting.The Company has not proposed to pass any resolution in this Annual General Meeting which is to be passed bymeans of Postal Ballot system.

MANAGEMENT DISCUSSION AND ANALYSIS

A) PRESENT STRENGTH OF THE COMPANY:

The company has tied up with a 50 years old strong edible oil brand ‘DHARTI BRAND’ for branding of variousedible oils. Various Edible oils under this strong , old brand will be packed and distributed from the company’sNaroda unit. The Edible oil business is company’s core business and demand of edible oils is growing inIndia @ of 10 percent per annum and infact the demand of branded edible oils is growing even faster withthe government having started taking actions to ban sale of edible oils in loose and implementation of itsorder for allowing sale of edible oils in packed format only under the packaging act.

B) FUTURE OUTLOOK:The Company will soon start its manufacturing activity too at the Naroda unit and start manufacturing edibleoils.


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DISCLOSURES

A) MATERIALLY RELATED PARTY TRANSACTION:During the financial year 2013-14 there was no transactions for sell/purchase of goods or services of materialnature with its promoters, the directors and the management, their subsidiaries or relatives, etc., which may havepotential conflict with the interest of the company at large. However details of transactions with related partiesare given in note (B) Notes of Accounts Schedule No. – 19 given by auditors as per Accounting Standard 18.

B) DETAILS OF NON-COMPLIANCEDuring the year, the Company had not made any default in statutory compliances with the Registrar of Companies,Stock Exchanges, SEBI or any other authorities for filing and submission of yearly, half yearly or quarterlyinformation. Any information which are event based are submitted within the statutory time limits as per provisionsof relevant rules and regulations or law to appropriate authorities.

MEANS OF COMMUNICATIONS:

ESTABLISHMENT OF INTERNAL MANAGEMENT INFORMATION SYSTEM:The Company has established the Management information system whereby any problem requiring policy decisionsare being intimated to Audit Committee for redressal or amendments in the policy and procedures. The progressreports are being maintained regularly. All the Investors’ grievances or share department related queries are addressedto the Compliance officer who in turn put the same before the Investors’ Grievances Committee.

INFORMATION SYSTEM BETWEEN COMMITTEES AND THE BOARDBoth Audit Committee and Investors’ Grievances Committees receive periodical regular information from the concernedfunctional heads, after resolutions of all the problems communicate back the same to functional heads for furthercommunications. The progress report and minutes of all meetings held of both the committees are being placedbefore the Board for information and taking the same on records.

INFORMATION SYSTEM BETWEEN THE COMPANY AND INVESTORSThe Company is regularly taking on record the un audited financial results on quarterly basis as per requirementsof the Clause 41 of the listing Agreement and the same are published. The Material information relating to the businessof the Company are being intimated to the Stock Exchange who in turn publish the same in their official bulletin.The Audited Financial Balance Sheet is being dispatched to every shareholder in time at their registered addresses.

STATUTORY COMPLIANCES MADE AND RETURNS ETC., FILEDThe Company has duly complied with the provisions of the Companies Act 1956, all the provisions of the ListingAgreement. The Company has also filed various unaudited financial results, Balance sheets, Income Tax returnsand other statutory returns with all the authorities in time. There are no defaults as on date in any such compliancesand no legal action of any nature has been taken against the company or its officers/ directors

DEMATERIALSATION OF SHARES AND LIQUIDITY:The Company has entered into Triparty Agreement with both Depository namely National Securities Depository Limited(NSDL) and Central Depository Services Limited (CDSL). Now the Shareholders have the option to hold their shareeither in physical form or in Demat form. However as per SEBI circular hereby advise all its shareholders to dematerializetheir holding at the earliest. Total Shares dematerialized up to 31/03/2014 is 11380604 shares.

SHARE TRANSFER SYSTEM :The share transfer system in physical form is processed and the Share Certificates are returned within a periodof 15 days from the date of receipt. At the end of the year, there were no complaints pending with the companyrelated to Transfer of shares.

NAME AND ADDRESS OF THE COMPLIANCE OFFICER:Mr. Vinodchandra K PandyaDirector203, Abhijeet-1, 2nd Floor,Mithakhali Six Roads, Ellisbridge,Ahmedabad – 380 007.


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STATUS OF LISTING / TRADING OF SHARES :The Company’s Equity Shares are at present listed and are freely traded on the Stock Exchange at Ahmedabadand Mumbai. The details of the Trading code are as under:Name of Stock Exchange : Trading CodeAhmedabad Stock Exchange (ASE) : 29590Mumbai Stock Exchange (BSE) : 500236

MARKET PRICE DATA – HIGH, LOW DURING EACH MONTH IN LAST FINANCIAL YEAR :(MARKET PRICE IN RS.)

Month Open High Low Close No. of No. of Total Delive- % Deli. SpreadPrice Price Price Price Shares Trades Turnover rable Qty to High- Close-

(Rs.) Quantity Traded Low OpenQuantity

Apr-13 4.08 5.38 3.69 5.38 3488 28 14169 3488 100 1.69 1.3

May-13 5.23 5.23 4.97 4.97 400 3 2040 400 100 0.26 -0.26

Jun-13 5.2 5.39 4.21 4.21 33731 9 151281 33731 100 1.18 -0.99

Jul-13 4 4.2 3.11 3.11 3271 10 12239 3271 100 1.09 -0.89

Aug-13 3.26 4.4 3.26 3.8 2327 14 9280 2327 100 1.14 0.54

Sep-13 3.62 4.45 2.96 4.45 1733 16 5779 1733 100 1.49 0.83

Oct-13 4.44 4.44 3.81 3.81 4345 26 18513 4345 100 0.63 -0.63

Nov-13 3.62 3.62 2.09 2.41 26216 52 68171 26216 100 1.53 -1.21

Dec-13 2.29 4.52 2.18 4.52 55844 129 194252 55844 100 2.34 2.23

Jan-14 4.74 9.61 4.7 9.38 724458 1210 5303926 724458 100 4.91 4.64

Feb-14 9.7 16.9 9.3 15.36 878103 5232 12509542 878103 100 7.6 5.66

Mar-14 15.9 17.5 13.8 14.25 419085 4210 6506533 419085 100 3.7 -1.65

Note : (1) The Face Value of equity shares of the company is Re. 1/- per share. As the Company’s share arenot included in any Index of the Stock Exchange, the effect of price movement of shares of the company viz aviz general index of the industry are not given.CATEGORY WISE HOLDING OF SHARES AS ON 31/03/2014 :

Category Shares % Percentageof Holding

Promoters 3806701 2.76%Bodies Corporate 1640895 08.91%Public (Indian) 12958894 70.38%NRI 5950 00.03%Total 18412440 100.00%

Distribution of Shareholding as on 31/03/2014 :

Description Holder (S) Holding (s)From To Folios % Shares %Less than 500 23722 89.649 462001 25.092501 1000 1836 06.939 1479914 08.0381001 5000 741 02.800 1559777 08.4725001 10000 83 00.314 591579 03.21210001 above 79 00.298 10161169 55.186


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OTHER DETAILS :

REGISTERED OFFICE : 203, Abhijeet-1, Mithakhali Six Roads, Ellisbridge,Ahmedabad- 380 006

BOOK CLOSURE DATES : 25th September 2014 to 29th September 2014(Both days inclusive)

REGISTRAR AND SHARE : System Support ServiceTRANSFER AGENT : 209, Shivai Ind. Estate, 89, Andheri Kurla Road,

Sakinaka, Andheri (E), Mumbai – 400 072

ISIN NUMBER OF THE COMPANY : INE 252 C 01015

Declaration by the Managing Director on Code of Conduct as required by Clause 49.1.(D) (ii).

This is to declare that the company has received affirmations of compliance with applicable Code of Conduct fromthe Directors and Senior Management personnel of the company in respect of the financial year 2013-14.



(DIN : 00610001)

CERTIFICATE OF COMPLIANCE WITH THE CODE OF CONDUCTFOR BOARD OF DIRECTORS AND KEY MANAGEMENT PERSONNEL

To,The Members,Dharti Proteins Limited,Ahmedabad.

I, Dhiren K Thakkar, Managing Director of the Company, hereby certify that all the Board Members and SeniorManagement Personnel of the Company have affirmed their compliance with the Code of Conduct in accordancewith Clause-49.I.D of the Listing Agreement entered into with Stock Exchange.

As required by Clause 49 of the Listing Agreement, Certificate of Compliance with the Corporate GovernanceRequirements by the Company issued by Auditors is given as an annexure to the Directors’ Report.

We further confirm that during the year, none of the Directors or any of the Key managerial persons had doneany trading in shares of the Company in the secondary market. Further the company had not made any allotmentof shares to any Directors or any of the key managerial personnel during the year.

The above Report was adopted by the Board at their meeting held on 31st May 2014.



(DIN : 00610001)


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CERTIFICATION BY CHIEF EXECUTIVE OFFICER ANDCHIEF FINANCIAL OFFICER OF THE COMPANY

We, Dhiren K Thakkar, Chairman of the Board of Directors and Audit Committee of Kanel Industries Limited, dohereby certify that:(a) We have reviewed the financial statement and the cash flow Statement for the year and to the best of our

knowledge and belief;(i) These statements do not contain any materially untrue statement or omit any material fact or contain

statement that might be misleading.(ii) These statements together present a true and fair view of the Company affairs and are in compliance

with existing accounting standards, applicable laws, and regulations.(b) As per the best of our knowledge and belief, no transactions entered into by Kanel Industries Limited during

the year which is fraudulent, illegal or volatile of the company’s Code of Conduct.(c) We are responsible for establishing and maintaining internal controls for financial reporting in Kanel Industries

Limited and we have evaluated the effectiveness of the internal control system of the company pertaining tofinancial reporting. We have disclosed to the auditors and Audit Committee, deficiencies in the design or operationof such internal controls, if any, of which we are aware and steps we have taken or propose to take torectify these deficiencies.

(d) We have indicated to the auditors and the audit Committee:(i) Significant changes in internal controls over financial reporting during the year.(ii) Significant changes in accounting policies during the year and the same have been disclosed in the

notes to the financial statements.(iii) Instance of Significant fraud of which we have become aware and the involvement therein, if any, of

the management of an employee having a significant role in the Company internal control system.(e) We affirm that we have not denied any personal access to the Audit Committee of the Company (in respect

of matters involving alleged misconduct, if any.)(f) We further declare that all Board Members and senior management have affirmed compliance with the code

of conduct for the current year.


VINODCHANDRA PANDYA (DHIREN K THAKKAR)CHAIRMAN OF AUDIT COMMITTEE MANAGING DIRECTOR

(DIN : 00610001)

AUDITORS' REPORT ON COMPLIANCE WITH CODE OF THE CORPORATE GOVERNANCE

ToThe Members ofKanel Industries LimitedWe have examined the relevant records for the year ended March 31, 2014 relating to the Compliance with therequirement of corporate Governance as stipulated under clause 49 of the Listing Agreement with the Stock Exchanges.On the basis of our review and according to the information and explanations given to us by the company, westate that in our opinion and to the best of our knowledge, the Company has complied with the mandatory requirementsas contained in the Listing Agreement with the Stock Exchanges and as per Section 292A of the Companies Act1956.

Date : 31st May 2014 For Shah Dinesh Dahyalal & associatesPlace : Ahmedabad Chartered Accountants,

(Dinesh D Shah)Proprietor

M No.: 106871Firm No.: 120362W


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INDEPENDENT AUDITORS REPORT

TO THE MEMBERS OF KANEL INDUSTRIES LTD

Report on the Financial Statements :We have audited the accompanying financial statements of KANEL INDUSTRIES LTD, (“the company”) which comprisethe Balance Sheet as at 31/03/2014, and the Statement of Profit and Loss and the Cash Flow Statement for theyear then ended, and a summary of significant accounting policies and other explanatory information.

Management’s Responsibility for the Financial Statements :The Company’s Management is responsible for the preparation of these financial statements that give a true andfair view of financial position, financial performance and cash flows of the company in accordance with the accountingprinciples generally accepted in India including Accounting Standards referred to in sub –section (3C) of section211 of the Companies Act 1956 (“the Act”) read with the General Circular No. 15/2013 dated 13th September, 2013.Thisresponsibility includes the design, implementation and maintenance of internal control relevant to the preparation andpresentation of financial statements that give a true and fair view and are free from material misstatements, whetherdue to fraud or error.

Auditor’s Responsibility: Our responsibility is to express an opinion on these financial statements based on ouraudit. We conducted our audit in accordance with the standards on auditing issued by the Institute of CharteredAccountants of India. Those standards require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether the financial statements are free from misstatements.

An Audit involves performing procedure to obtain audit evidence about the amounts and disclosures in the financialstatements. The procedures selected depend upon auditor’s judgment, including the assessment of the risk of materialmisstatements of the financial statements, whether due to fraud or error. In making those risk assessment, theauditor considers internal control relevant to the Company’s preparation and fair presentation of the financial statementsin order to design audit procedure that are appropriate in the circumstances. An audit also includes evaluating theappropriateness of accounting policies used and the reasonableness of accounting estimates made by management,as well as evaluating the overall presentation of financial statements.

We believe that audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion :In our opinion and to the best of our information and according to the explanations given to us the aforesaid financialstatements give the information required by the Act in the manner so required and give a true and fair view inconformity with the accounting principles generally accepted in India:

(a) in case of the Balance Sheet, of the state of affairs of the Company as at 31/03/2014;

(b) in case of Statement of Profit and Loss , of the Loss of the Company for the year ended on that date;and

(c) In the case of Cash Flow statement, of the cash flow for the year ended on that date

Report on Other Legal and Regulatory Requirements :1. As required by the Companies (Auditor’s Report) Order,2003(“the order”), as amended, issued by Central

Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statementson the matters specified in paragraphs 4 and 5 of the order.

2. Further to our comments in the Annexure referred to above, we comment that:a. Delhi High Court has remanded back the company to BIFR in its pending appeal on 19th January, 2010 and

thereafter in the next hearing held on 29/04/2010, and as per the order of the Honorable Delhi High-court,BIFR had appointed IDBI as OA to inspect the unit and submit the report thereon. In the last date of hearingon 29/08/2013, the honorable BIFR has directed the company to revise and resubmit with OA, the DRS, withcutoff date as 31/03/2013.The Company had submitted the revised DRS to OA as directed by the HonorableBIFR but in the hearing on 27/03/2014 due to late submission by OA (IDBI) with respect to certain queryof the BIFR, the BIFR dismissed the company’s reference. However the Company is filling an appeal withAAIFR against the order of BIFR.


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b. Dividend declared in year 1995, 1996, 1997 and 1998 and remained unclaimed are due for transferto Investors Education and Protection Fund under the provisions of Sec 205C of the Companies Act,1956. It has been informed by the management that details for unclaimed dividend are not providedby the nominated bank, SBI [ Previously SBS ] , Industrial finance Branch, Ellisbridge, Ahmedabadand SBI [ Previously SBS Isanpur Branch, Ahmedabad]. In absence of proper records and supportingevidences, we could not quantify the amount not transferred as required by the law and its compliance.

c. The Company has taken inter corporate loan of Rs 4.91 Lacs [unsecured ] and unsecured loans from relatedparties/firms of Rs. NIL and from Non Related person Rs.15 lacs unsecured loan during the financial yearunder audit. The Closing Balance at the year end are Rs. 681.77 Lacs in case of inter corporate loans andRs.107.68 lacs for related parties and firms and from key management person and Rs.15 lacs from otherparties. No interest provided on loan accounts. In absence of formal agreement or supporting other documetns,we could not comment and could not quantify the non provision of interest thereon.

Out of total Inter Corporate Loans as above, the Company has taken Mortgage Loan of Rs. 5 Crorefrom Adani Enterprises Ltd in earlier years. We are not provided any formal Loan Agreement copyexcept Mortgage Deed which does not contain any repayment terms and interest rate. No interestis provided on such Loans. We are unable to comment upon non provision of interest, repaymentschedule etc. in absence of any formal agreement with the company and related documents andinformation. Account confirmation copy is not available for our verification.

d. Company has not made provision for doubtful Debtors of Rs 95.93 Lacs, for the debtors outstandingfor the long time, to that extent, Current Assets have been overstated and current years Losses andaccumulated losses have been understated.

e. The Company has violated provisions of Income Tax Act, 1961 by non filing Income Tax Returnsfrom FY 2008-09 onwards. Proper records are not made available to us for our verification and tocompute Income Tax and related statutory liabilities. In this situation, we are unable to commentupon the non provision of statutory liabilities for current year as well as for the earlier years.

f. The Company has not deducted TDS from Professional fees paid / credited on sum of Rs. 405000/- duringthe financial year under audit.

g. The Company has violated provisions of Sec 383A of the Companies Act., 1956 by non appointingfull time company secretary.

h. We have not received report on Corporate Governance as required by Clause 41 of the listingagreement for our verification.

i. Internal Control system needs to be strengthen for recovery of outstanding dues, high cash transactions andhigh cash on hand on balance sheet date.

j. Bank Balance certificate or Bank Statements for various banks including No lien accounts with banksshowing total balance of Rs. 89.30 Lacs are not available with the company. Management is of opinionthat banks are not providing such required bank statements or certificates hence all accounts arecarried forward showing as bank balance. It is also not clarified that whether these bank balancesin No-lien accounts are receivable by the company or adjusted against bank loans setteled underOTS in earlier years since all respective banks debts have been settled under OTS in earlier years.In absence of such documents and clarifications, we could not comment upon the genuineness ofbalance with banks and as per our opinion, current assets are overvalued to the extent of this amountand to the extent losses are under valued.[ Read with Notes No.26]

In addition to our observation in clause (a) to (j) above, the Naroda Unit has been inoperative sincelast many years. There is Trading activities during the year under audit but majority Financial indicatorsand operating indicators remained negative and to the date of Audit report and in absence of formaldevelopments for financial support, there is substantial doubt that it will be able to continue as agoing concern even though the books of accounts of the Company has been prepared on theassumption of a Going Concern basis. In this situation, adjustments may be required to the recorded


22

assets amounts at current value and classification of liabilities is required. The financial statementsdo not disclose this fact.

Further to our comments in the annexure referred to in paragraph 2 above, we report as follows :a. We have obtained all the information and explanation which to the best of our knowledge and belief were

necessary for the purposes of our audit except certain non receipt of confirmation of balances in respectof loans and Advances, Deposits, Debtors and Creditors, Banks and Financial Institutions. [Read with NotesNo.27] and certain documents and records in relation to areas of non-compliance as mentioned in para (a)to (i) above.

b. In our opinion proper books of accounts as required by the law have been kept by the Company so far asappears from our examination of the books of accounts.

c. The Balance sheet, the Statement of Profit and Loss and the Cash Flow statement dealt with by this reportare in agreement with the books of accounts.

d. In our opinion, Balance Sheet, the Statement of Profit and Loss and Cash Flow statements complied withthe Accounting Standards referred to in Sub Sec 3C of Sec 211 of the Act read with General Circular 15/2013 dated 13/09/2013 of the Ministry of Corporate Affairs in respect of Sec 133 of the Companies Act. 2013.

(i) The Company has not complied with AS 28, introduced w.e.f. 1st April, 2004 while preparingthe financial statements. The Management have not assessed technically the Plant andMachineries at Naroda Unit to decided about its impairment or carrying Value. The carryingamount of the assets was not reviewed for indication of impairment of assets on basis of internal/external factors. Plant at Naroda Division has been in operative for Seventeen years. Plant& Machinery of book value of Rs.18.27 lacs less residual value has not been written off tothe extent to come down to its carry value. Loss for the year has been under stated to theextent of book value of plant and machinery balance not written off.

(ii) The Company has not complied with AS 22, Accounting for Taxes on Income. The companyfailed to file Income Tax Returns for the F Y 2008-09 onwards. In absence proper documentsand records, we could not quantify the Income Tax liability for which provision not made.Deferred Tax Assets/Deferred Tax Liabilities are not provided for in the books of accounts, inabsence of proper working and database from the management. We could not quantify thenon provision for DTL or disclosures regarding DTA.[Read with Notes “2(e) of Main Audit Reportand read with note no. 35”]

e. On the basis of written representation received from the Directors as on March 31, 2014 and taken on recordby the Board of Directors, we report that none of the directors is disqualified as on March 31, 2014 frombeing appointed as a director in terms of clause (g) of sub-section (1) of the Section 274 of the CompaniesAct, 1956.

For, SHAH DINESH DAHYALAL & ASSOCIATESChartered Accountants

FIRM REGISTRATION NO. 120362W

Place : Ahmedabad Shah Dinesh D.Date : 31/05/2014 Proprietor

MEMBERSHIP NO.: 106871


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ANNEXURE TO THE AUDITORS’ REPORT OF

KANEL INDUSTRIES LTD.

The annexure referred to in our report to the member of KANEL INDUSTRIES LTD. (‘the company’) for the yearended on 31st March, 2014, we report that;1. (a) The Company has maintained proper records showing full particulars including quantitative details and

situation of fixed assets.

(b) During the year, fixed assets of the Company have not been physically verified by theManagement. The management decided to implement program of regular physical verificationof all fixed assets at least once in a two year, which in our opinion, is reasonable, havingregard to the size of Company, present business operations and the nature of the Fixed Assets.In absence of physical verification report, we could not comment on material discrepancy infixed assets of the company.

(c) During the year under audit, the company has not disposed off the fixed assets but NarodaUnit is inoperative since last many years and in a situation of majority negative financial aswell as operational indicators, the going concern concept is affected [read with point no. 2(i)of our main audit report]

2. (a) According to the information and explanation given to us, inventories have been physically verified bythe management during the year. In our opinion the frequency of verification is reasonable having regardto the size of the company and the nature of its business.

(b) In our opinion and according to the information and explanation given to us, the procedures of physicalverification of inventories followed by the management are reasonable and adequate in relation to thesize of the company and the nature of its business.

(c) The Company is maintaining proper records of inventory. As there is no Inventory on balance sheetdate, question of material discrepancies on physical verification between the physical stocks and thebook records does not arise.

3. In respect of Loans Secured or Un-secured granted by the company to companies, firms or other partiescovered in register maintained U/S 301 of the Companies Act, 1956, according to the information and explanationgiven to us

(a) During the year, the company has granted loans of Rs.7.30 lacs [ Rs. Nil in previous year ] to relatedparty and closing balance on balance sheet date Rs.NIL [ Rs. NIL in previous year ] and maximumbalance outstanding during the year amounted to Rs. 7.30 Lacs [ Rs. NIL in previous year ]

(b) Above referred loans are interest free and does not carry any other terms and conditions and as suchthe Loans, in our opinion, are prejudicial to the interest of the company.

(c) During the year, Principal amount granted was received by the company. No interest charged to theparty. There is no question of regularity of repayment of interest.

4. (a) The Company has taken Unsecured loans from 1 related party covered in the register maintainedU/s 301 of the Companies Act., 1956. The maximum amount involved during the year was Rs.491500.

(b) In absence of proper loan agreement, we could not comment on the interest provided or not. Managementexplained that above referred loans are interest free, in our opinion, they are not prejudicial to the interestof the company.

(c) During the year, there had been a repayment towards principal. No interest is provided on any loanaccount. In absence of proper loan agreement and any other terms and conditions on which loan taken,we are unable to comment on the regularity of repayment of principal and payment of interest.

5. In our opinion and according to the information and explanations given to us, there are adequate internal controlprocedures commensurate with the size of the company, the nature of its business and taking into considerationof overall business volume during the year with regard to trading activities, inventory, fixed assets and with regardto the business activities. On basis of our examination of the books and records of the Company, and accordingto the information and explanations given to us, we have neither come across nor have been informed of anycontinuing failure to correct major weaknesses in the aforesaid internal control procedures except the high cashtransactions during the year, high Cash on Hand on many dates and at the end of year, balance confirmation


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from parties, Banks, ESIC/PF departments and very slow debtors recovery, implementation of verification scheduleof fixed assets. Internal controls should be strengthen in such sensitive area.

6. (a) Based on the audit procedures applied by us and according to the information and explanations providedby the management, we are of the opinion that the transaction that need to be entered into the registermaintained under section 301 have been so entered, if required.

(b) In our opinion and according to the information and explanations given to us, the transactions madein pursuance of contracts or arrangements entered in the register maintained under section 301 of thecompanies act, 1956 and exceeding the value of Rs. Five lacs have been so entered if required.

7. On the basis of information and explanations given to us company has accepted deposit in violationduring the year from the public, within in violation of section 58A and 58AA of the companies act1956 and companies (Acceptance of deposits) Rule 1975 with regard to acceptance and payment ofdeposits from public.

8. The company has no Internal Audit system during the year under Audit.

9. According to the information and explanation given to us, the Central Government has not prescribedmaintenance of cost records under section 209(1) (d) of the Companies Act, 1956, for any of the productsof the company.

10. (a) According to the information and explanations given to us, the Company has not been regularin depositing undisputed statutory dues towards Employees’ State Insurance, TDS, ProfessionalTax, Sales Tax, Income Tax and Municipal Tax during the Financial Year as well as of earlieryears outstanding balance.

The undisputed dues, as informed by the management, which are outstanding for more thansix months as at the Balance Sheet date from the date they became payable were as follows.

SR. NATURE OF DUE AMOUNT OUTSTANDING AS ON 31/03/2014 [Rs. In Lacs]For more than 6 months And already due

01 Income Tax 98.1002 TDS Payable 1.0503 Sales Tax 17.5304 E.S.I.C. 0.5605 FBT tax 0.0606 Professional Tax 0.34

[TDS is not deducted during the year at the time of payment or credit to the parties and not paidto the Central Government such details are not included in above figures. ESI and Professional Taxare not paid during the year under audit and the company is not providing for interest accruedon above all amounts payable. In absence of required statutory records to ascertain the total amountrelating to Interest thereon, the above amount does not includes the interest and penalty portion.In absence of Sales Tax Assessment order/Return copy and non filing of Sales tax Returns for theF Y 2007-08 to 2012-13 and in absence of required details and documents we are unable to quantifythe statutory liabilities relating to tax as well as of Interest and penalty there on].Amount due as per demand notice served by the Income Tax department is Rs.136.37Lacs for thevarious assessment years. It was explained by the management that difference is not reconciled andnot provided in books of account.(b) According to the information and explanation given to us by the management of the Company,

there are no dues of Sales Tax and Income Tax which have not been deposited on accountof any dispute except as mentioned in clause “a” above and as mentioned below. We furtherreports that quantum of liability towards TDS payment is not worked out since the Companyhas not complied with the provisions of Income Tax Act to the extent and no amount providedfor. Fact mentioned as below does not includes such liability. We are further informed by themanagement that during the F Y 2013-14, there were no further Order, Notice or otherdevelopments relating to matters pending for earlier years as well as for the year under Auditin case of Income tax and Sales tax Matter.


25

SR. NATURE OF AMOUNT FORUM WHERE DISPUTE IS PENDINGNO. DUES [Rs. In Lacs]01 Sales Tax 274.63 The Matter is remanded back to Asst.

Comm.Of Sales tax. [A.Y. 1998-99]02 Sales Tax 245.92 Pending with the Appellate tribunal of

Sales Tax [A.Y. 1997-98]03 Sales Tax 24.30 Appeal Pending with Jt. Commercial

Tax Commissioner, Appeal Division-1 [A.Y. 1999-2000]04 Sales Tax 6.14 Appeal pending with Jt. Commercial

Tax Commissioner, Appeal Divi.-1 [A.Y. 2000-01]05 Sales Tax 2.88 Appeal pending with Jt. Commercial

Tax Commissioner, Appeal Divi.-1 [A.Y. 2000-01]06 Municipal Tax 10.95 Ahmedabad Municipal Corporation [Dues up to October, 2004]

[Above details are based on records made available to us for the verification only.]11. In our opinion, the accumulated losses of the Company have exceeded fifty percent of the net worth as at

the end of the financial year 2013-14. The Company has incurred Cash Losses of Rs. 1.08 crores duringthe financial year under audit and the company had incurred cash losses of Rs. 1.38 Crores the immediatelypreceding financial year.

12. We are of the opinion that banking dues have been settled under OTS in earlier years and thecompany has generally not defaulted in repayment of dues to bank or financial institutions in yearunder audit. Further we report that the Company has taken secured Loans from the Company ofRs. 5 Crore in earlier year. There is no repayment towards principal or Interest. Management hadnot provided us copy of agreement containing terms and conditions for repayment and interest charges.In absence of the same, we could not comment on repayment schedule or default status.

13. The Company has not granted any loans and advances on the basis of security by way of pledge of shares,debentures and other securities.

14. In our opinion, the Company is not a chit fund, nidhi, mutual benefit fund of society. Therefore the provisionsof clause 4 (xiii) of the Companies (Auditor’s Report) Order, 2003 are not applicable the Company.

15. In our opinion, the Company is not dealing in or trading in shares, securities, debenture and other investments.During the year under audit, the company has done transactions with Commodity market for agriculture productsand there are Nil position pending on 31st March, 2014

16. In our opinion and according to information and explanations given to us, the Company has not given anyguarantee for loans taken by others from banks or financial institutions during the year as per the informationgiven by the management and available records made available for our verification.

17. In our opinion, no term loans were availed by the Company during the financial year except unsecured loanstaken from directors and related firms and their relatives as reported in Point No. 4(a).

18. According to the information and explanations given to us and on an overall examination of the balance sheetof the company, we report that the no funds raised on short-term basis have been used for long-term investmentand No long-term funds have been used to finance short-term assets except core (permanent) working capitalduring the year under Audit.

19. Based on our examination of records and information provided to us by management we report that the companyhas not made preferential allotment of shares to parties and companies covered in the register maintainedunder section 301 of the Act.

20. During the year covered by our audit report, the company has not issued any debentures.21. The Company has not raised any money by public issue during the year.22. According to the information and explanation given to us, no fraud on or by the company has been noticed

or reported during the course of our audit.

For, SHAH DINESH DAHYALAL & ASSOCIATESChartered Accountants

FIRM REGISTRATION NO. 120362WPlace : Ahmedabad Shah Dinesh D.Date : 31/05/2014 Proprietor

MEMBERSHIP NO.: 106871


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BALANCE SHEET AS AT 31 March, 2014In (Rupees)

Particulars Note AS AT AS ATNo. 31 March, 2014 31 March, 2013

I. EQUITY AND LIABILITIES :1. Shareholders’ Funds -40149730 -37968814

(a) Share Capital 2 184124400 184124400(b) Reserves and Surplus 3 --224274130 -222093214

2. Non-Current Liabilities 50000000 50000000(a) Long-Term Borrowings 4 50000000 50000000

3. Current Liabilities 143122916 53776445(a) Short-Term Borrowings 5 30445353 29965853(b) Trade Payables 6 99646049 10078830(c) Other Current Liabilities 7 1262294 1968048(d) Short-Term Provisions 8 11769221 11763714

TOTAL 152973186 65807631

II. ASSETS :1. Non-Current Assets : 15101548 16242344

(a) Fixed Assets 9 11865525 12773957(i) Tangible Assets 11865525 12773957

(b) Non-Current Investments 10 20000 20000(c) Long-Term Loans and Advances 11 3216023 3448387

2. Current Assets : 137871638 49565287(a) Trade receivables 12 128560693 38624845(b) Cash and Cash Equivalents 13 9271744 10901241(c) Short-Term Loans and Advances 14 39201 39201

TOTAL 152973186 65807631

As per my even report of the date

For, SHAH DINESH DAHYALAL & ASSOCIATES For, Kanel Industries Ltd.CHARTERED ACCOUNTANTS

Dinesh D ShahProprietor Director DirectorM. No. 106871Firm Regi. No. 120362W

Date : 31/05/2014 Date : 31/05/2014Place : Ahmedabad Place : Ahmedabad


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STATEMENT OF PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31 March, 2014In (Rupees)

Particulars Note 1-APR-2013 1-APR-2012No. TO TO

31-MAR-2014 31-MAR-2013

I. Revenue from Operations 15 86215954 --II. Other Income 16 290252 677463

III. TOTAL REVENUE (I + II) 86506206.00 3612446.00

IV. EXPENSES :Purchases of Stock-in-Trade 17 86105828 --Employee Benefit Expenses 18 226500 250000Depreciation and Amortization Expenses 19 912135 1034793Other Expenses 20 1442659 2867966

TOTAL EXPENSES 88687123.00 6006351.00

V. Profit before Exceptional and Extraordinary Items and Tax (III-IV) -2180916 -3475296VI. Exceptional Items -- --VII Profit before Extraordinary Items and Tax -2180916 -3475296VIII. Extraordinary Items -- --IX. Profit Before Tax -2180916 -3475296X. Tax Expense -- --

Current TaxDeferred Tax

XI. Profit/(Loss) for the period from Continuing Operations(IX-X) -2180916 -3475296XII. Profit/(Loss) from Discontinuing Operations -- --XIII. Tax Expense of Discontinuing Operations -- --XIV. Profit/(Loss) from Discontinuing Operations (after tax)(XII-XIII) -- --XV. Profit(Loss) for the Period(XI+XIV) -2180916 -3475296XVI. Earnings per Equity Share

- Basic -- --- Diluted -- --






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SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO THE FINANCIAL STATEMENTS

(1) SIGNIFICANT ACCOUNTING POLICIES :(A) METHOD OF ACCOUNTING :

(i) The Financial Statements have been prepared to comply in all material respects with the NotifiedAccounting Standards by The Companies Accounting Standard Rules, 2006 and the relevant provisionsof the Companies Act, 1956. The accounts are prepared on historical cost basis and on the principlesof a going concern.

(ii) The company generally follows mercantile system of accounting and recognizes significant itemsof income and expenditure on accrual basis except specified below

(a) Liability of Sales Tax, Income tax for pending assessments.

(b) Employees Benefit in respect of Gratuity, Leave Encashment and Bonus.

(B) USE OF ESTIMATES :The preparation of financial statements requires estimates and assumptions to be made that affect thereported amount of assets and liabilities on the date of the financial statements and the reported amountof revenue and expenses during the reporting period. Difference between the actual result and estimatesare recognised in the period in which the results are known / materialised.

(C) FIXED ASSETS :(i) Tangible Fixed Assets acquired by the company are reported at acquisition value, with deduction

for accumulated depreciation [ other than “freehold land “ where no depreciation is charged]. Theacquisition value includes purchase price, inward freight, duties, taxes and incidental expenses relatedto acquisition and installation and allocable pre-operative expenditure.

(ii) Intangible Fixed Assets: there is no intangible fixed assets.

(iii) There is no Capital work in progress during the year under audit.

(D) DEPRECIATION :Depreciation has been provided on the assets in accordance with Section 205(2) of the CompaniesAct, 1956 on written down value method at the rates prescribed under Schedule XIV to the CompaniesAct, 1956. Depreciation on Plant & Machinery at Naroda unit has been provided for normal Wear &tear though it has been inoperative throughout the year.

(E) INVESTMENTS :All the investments are current investments and valued at purchase cost.

(F) INVENTORIES :Raw Materials and finished goods are valued at cost or net realizable value whichever is lower.

(G) REVENUE RECOGNITION :(i) SALES - Sales are exclusive of all the duty, forwarding charges. (ii) Dividend income are realized

on cash basis. (iii) Commodities settlement income/charges recognize on settlement of dues.(iv)Interest Income from Bank Fixed Deposit accounted on cash basis. (v) Rent Income is accountedon accrual basis.

(H) RETIREMENT BENEFITS :Gratuity, other ex-gratia benefits and leave encashment are accounted on cash basis. Provisions forProvident Fund, Super annuation, pension and ESIC are not applicable to the company as number ofemployees are below statutory limit.

(I) TAXATION :Current Tax provision not done by the company. Management is arranging to file all income tax pendingreturns and at that time current tax provision will be workout.Deferred tax assets arising on account of brought forward business losses including unabsorbeddepreciation are recognised only when there is virtual certainty supported by convincing evidence that


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such assets will be realised. Deferred tax assets arising on temporary timing difference are recognisedonly if there is reasonable certainty of realisation.

(J) PROVISIONS &CONTINGENCIES :A provision is recognized when the Company has a present legal or constructive obligation as a resultof past event and it is probable that an outflow of resources will be required to settle the obligations,in respect of which reliable estimate can be made. These are reviewed at each balance sheet andadjusted to reflect the current best estimate. Contingent liabilities are not recognised but are disclosedin the notes to the Financial Statements to the extent of details available. A contingent Assets is neitherrecognised nor disclosed.

(K) PROVISION FOR BAD AND DOUBTFUL DEBTS :Provision for bad and doubtful debt has been made as per management’s option and their decision,if any.

(L) CASH FLOW STATEMENT :Cash Flow are reported using the indirect method, whereby profit (loss) before tax is adjusted for theeffect of transactions of a non-cash nature and any income due to writing-off liabilities of the companyand any expenses due to provision for bad debts have been considered as extra ordinary item.

Cash and Cash equivalents presented in the Cash flow statement consist of cash on hand and demanddeposits with bank and balance with dormant bank accounts [ read with Notes no 26] .

(M) IMPAIRMENT OF ASSETS :Impairment loss is charged to the profit and loss account in the period in which, an asset is identifiedas impaired, when the carrying value of the asset exceeds its recoverable value. The impairment lossrecognized in the prior accounting periods is reversed if there has been a change in the estimate ofrecoverable amount.

(N) BORROWING COST :Borrowing cost attributable to acquisition, construction or production of qualifying assets are capitalizedas part of the cost of that assets, till the assets is ready for use. Other Borrowing costs are recognizedas an expense in the period in which these are incurred.

(O) PRELIMINARY EXPENSES :Preliminary expenses and Share issue expenses have been amortized over a period of years as definedin section 35D of Income Tax Act, 1961.

(P) EARNING PER SHARE :The Basic and Diluted Earning Per Share ( EPS) is computed by dividing the net profit after tax forthe year by weighted average number of equity shares outstanding during the year.


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NOTES ON FINANCIAL STATEMENTSIn (Rupees)

Particulars AS AT 31 March, 2014 AS AT 31 March, 2013No. of Shares Amount No. of Shares Amount

2. SHARE CAPITAL :2.1 AUTHORIZED, ISSUED, SUBSCRIBED AND

PAIDUP SHARE CAPITAL :Authorised Share Capital :Equity Shares of Rs. 10.00 each 20000000 200000000.00 20000000 200000000.00

Total 20000000 200000000.00 20000000 200000000.00

Issued Share Capital :Equity Shares of Rs. 10.00 each 18412440 184124400.00 18412440 184124400.00

Total 18412440 184124400.00 18412440 184124400.00

Subscribed and fully paid :Equity Shares of ? 10.00 each 18412440 184124400.00 18412440 184124400.00

Total 18412440 184124400.00 18412440 184124400.00TOTAL 18412440 184124400.00 18412440 184124400.00

The Company has only one class of shares referred to as equity shares having a par value of Rs. 10/- . Eachholder of Equity shares is entitled to one vote per share.

Particulars AS AT 31 March, 2014 AS AT 31 March, 2013No. of Shares Amount No. of Shares Amount

2.2 RECONCILIATION OF SHARE CAPITAL :Equity Shares (Face Value Rs. 10.00)Shares outstanding at the beginning of the year 18412440 184124400.00 18412440 184124400.00Shares Issued during the yearShares bought back during the yearShares outstanding at the end of the year 18412440 184124400.00 18412440 184124400.00

Particulars AS AT 31 March, 2014 AS AT 31 March, 2013No. of Shares % of Holding No. of Shares % of Holding

2.3 SHAREHOLDERS HOLDING MORE THAN 5% OF SHARE :HITESH K THAKKAR 1024710 5.57 % 1024710 5.57 %DHIREN K THAKKAR 1743598 9.47 % 885010 4.81 %

Particulars AS AT AS AT31-MAR-2014 31-MAR-2013

3. RESERVES AND SURPLUS :Other Reserves 194859100 194859100Opening balance 194859100 194859100Closing balance 194859100 194859100Surplus -419133230 -416952314Opening Balance -416952314 -413477018(+) Net profit/(Net loss) for the Current Year -2180916 -3475296(+) Profit & Loss A/c ( 2013-14) 2180916 0(-) Profit & Loss A/c ( 2012-13 ) 0 3475296Closing balance -419133230 -416952314

TOTAL -224274130 -222093214


31



4. LONG-TERM BORROWINGS :Secured 50000000.00 50000000.00Loan from Banks :Inter-Corporate loans 50000000.00 50000000.00

TOTAL 50000000.00 50000000.00

Nature of Security and terms of repayment for long term secured borrowings :4.1 Inter Corporate Loan from Adani Enterprise Ltd of Rs. 5 Crore [ Previous Year Rs. 5 Crore ] is secured

by Equitable mortgage of Plot No. 213, 214/2 &3 in the Naroda Industrial Estate consisting Revenue S No.174 p & 175 / part withing the village limit of Muthia , Dist Ahmedabad. AND Unit No 101 & 102 of TJRhouse, Mithakhali, Ahmedabad AND office no. 203 of ABHIJIT, Mithakhali Six Roads, Ahmedabad and personalproperties of Directors and their relatives.No repayment terms & rate of interest mentioned in mortgage deed and no other loan agreement madeavailable to us for verification.


5. SHORT-TERM BORROWINGS :

Unsecured 30445353 29965853Loans repayable on demand 2350000 850000From other parties

Kadam Exports Pvt. Ltd. 850000 850000Tushar N Shah 1500000 0Loans and advances from related parties 28095353 29115853Dhiren K. Thakkar 3268332 4768332Kanaiyalal J Thakkar ( H U F ) 7500000 7500000T.J.R. Finance Ltd. 5471100 5471100TJR Sons Ltd. 11855921 11376421

TOTAL 30445353 29965853

6. TRADE PAYABLES :

Others 99646049 10078830

TOTAL 99646049 10078830

7. OTHER CURRENT LIABILITIES :Other Payables 1262294 1968048

TOTAL 1262294 1968048

8. SHORT-TERM PROVISIONS :Others 11769221 11763714

TOTAL 11769221 11763714


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9. FIXED ASSETS :GROSS BLOCK DEPRECIATION NET BLOCK

Particulars As on Addition Deductions As on Up to Provided Adjustment As on As at As atof Assets 01.04.13 During During 31.03.14 31.03.13 For the for 31.03.14 31.03.14 31.03.13

the the Year Ded./year year Sales

9.1 TANGIBLEASSETS :LAND 3797183 0 0 3797183 0 0 0 0 3797183 3797183FACTORY BUILDING 17777122 0 0 17777122 13600171 417695 0 14017866 3759256 4176951OFFICE BLDG.(NARODA) 1125000 0 0 1125000 654896 23505 0 678401 446599 470104OFFICE BLDG. 3283230 0 0 3283230 1612332 83545 0 1695877 1587353 1670898OFFICE EQUIPMENT 1388812 3703 0 1392515 1257217 18907 0 1276124 116391 131595PLANT & MACHINERY 17984436 0 0 17984436 15861638 295282 0 16156920 1827516 2122798FURNITURE &FIXTURE 6264112 0 0 6264112 5859684 73201 0 5932885 331227 404428TOTAL 51619895 3703 0 51623598 38845938 912135 0 39758073 11865525 12773957Previous Year Figures 51619895 0 0 51619895 37811145 1034793 0 38845938 12773957 13808750

9.2 There are no Intangible Assets and Capital Work in Progress as on Balancesheet date.



10. NON-CURRENT INVESTMENTS :Trade InvestmentsNational Savings Certificate 15000 15000Other InvestmentsAhmedabad Comm. Exch. Ltd. - Shares 5000 5000

TOTAL 20000 20000

11. LONG-TERM LOANS AND ADVANCES :Security Deposits 832915 912915Secured, considered good 327715 407715Unsecured, considered good 505200 505200Advance Income Tax (net of provisions) 1013108 1010472Unsecured, considered good 1013108 1010472Balances with Government Authorities 1270000 1250000Unsecured, considered good 1270000 1250000Other loans and advances 100000 275000Unsecured, considered good 100000 275000

TOTAL 3216023 3448387

12. TRADE RECEIVABLES :Outstanding for more than 6 months from the due date

Unsecured, considered good 89935848 0Outstanding for more than 6 months from the due

Unsecured, considered doubtful 38624845 38624845

TOTAL 128560693 38624845


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13. CASH & CASH EQUIVALENTS :Balances with banks 17705 1004037Earmarked Balances 17705 1004037Cash on hand 323829 966994Others 8930210 8930210

TOTAL 9271744 10901241The closing cash and cash equivalents as at 31-3-2014 of Rs.9271744 includes Rs.8930210/- with banks in nolien deposit accounts. Balance in no lien deposit accounts shall not be freely available with the bank.

14. SHORT-TERM LOANS AND ADVANCES :Other Loans and Advances 39201 39201Unsecured, considered good 1433 1433Unsecured, considered doubtful 37768 37768

TOTAL 39201 39201

15. REVENUE FROM OPERATIONS :Sale of Products 86215954 0

TOTAL 86215954 0

16. OTHER INCOME :Interest Income 0 47978Other Non-Operating Income 290252 629485

TOTAL 290252 677463

17. PURCHASES OF STOCK-IN-TRADE :Castor Seed Pur. 80940316 0Washed Cottonseed Oil Pur. 5165512 0

TOTAL 86105828 0Broad Heads of Materials PurchasedCastor Seeds 80940316 0Washed Cottonseed Oil 5165512 0

TOTAL 86105828 0

18. EMPLOYEE BENEFIT EXPENSES :Salaries and Wages 226500 250000

TOTAL 226500 250000

19. DEPRECIATION AND AMORTIZATION EXPENSES :Depreciation 912135 1034793

TOTAL 912135 1034793

20. OTHER EXPENSES :Payment to Auditors 90000.00 100000.00Payment to Auditors 90000 90000As Auditor 90000 90000Prior period items 0 4201Repairs to buildings 3233 18840Rates and taxes (excluding taxes on income) 193806 55325Miscellaneous expenses 1155620 2699600

TOTAL 1442659 2867966


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21. The figures of the previous year have been regrouped, rearranged and changed wherever necessary so asto make them comparable with the current year.

22. The information’s / details are as per the books maintained and determined and information compiled andfurnished on the computer.

23. Management have broadly reviewed the data on the basis of compiling details and information and have testchecked wherever considered necessary the books and / or the details / information compiled in the companyand also on the computer.

24. The Company has initiated the process of identifying the suppliers who qualify under the definition of Microand Small Enterprises, as defined under the Micro, Small and Medium Enterprises Development Act, 2006.Since no intimation has been received from the suppliers regarding their status under the said Act as at31st March, 2014, disclosures relating to amounts unpaid as at the year end, if any, have not been furnished.In the opinion of the management, the impact of interest, if any, that may be payable in accordance withthe provisions of the Act is not expected to be material and NIL.

25. Wherever external evidence in the form of bills, invoice, and debit notes, credit notes, Journal entry etc arenot available. Management has relied upon the internal vouchers prepared and authenticated by the directors/Authorized officers of the company and also entry passed in the accounts maintained by the company.

26. Bank Account statement / balance certificate of Denabank [ No lien A/c ], SBI [ previously SBBJ ( No lienA/c ) 2.5%, previously SBBJ ( No lien A/c )10%, previously SBS ( No lien A/c ) 10% are not available.Management trying hard to get all such required statements / certificates from the banks. Management havewritten letters to the above banks requesting them for submission of latest bank statements directly to theAuditor but the same are not received. Balance with No lien deposit account with banks does not reconcilewith total transactions of Company.

27. Account confirmations in respect of some of the accounts of Sundry Debtors, Creditors, Loans and Advancesand some of the banks and financial institution have not been received and they are subject to confirmationsand reconciliations. The management is of the opinion that adjustments, if any, arising out of such reconciliationwould not be material effecting current Year financial statements.

28. The company has not provided for listing fees of Jaipur, Calcutta and Ahmedabad Stock Exchange.

29. Certain documents, registers, etc. including fixed assets register were seized during the search operationsas on 5th October, 2001. Such registers were not made available except fixed assets register prepared bymanagement separately to us for inspections, usual verifications and periodical updation.

30. In absence of sufficient non-executive/ professional directors, company could not comply with report on corporategovernance and audit committee u/s 292A of the Companies Act, 1956 has not been formed.

31. The management is in the process to start manufacturing activities and will implement the stringent remedialactions for the recovery of outstanding dues, optimum utilisation of cash management, maintenance and updatingof proper stock records, stringent controls over production, receipt and dispatch of stock, direct settlementof debtors/creditors through journal entry and improving overall profitability and adequate capacity utilisationof the factories.

32. The company had deposited the amount of dividend declared in preceding years with SBS Isanpur Branchand SBS IFC Branch. As per the amendments made in the Companies Act, 1956 the amount of unclaimeddividend has to be transferred to special fund called Investor Protection and Education Fund from the dateon which the unclaimed dividend has been transferred to a special bank account. Company has no informationabout the balance of unclaimed dividend with Bank. In absence of the above information, management is unableto comment about status of unclaimed dividend amount or its transfer to Investor Protection and EducationFund. Since dividend declared in year 1995, 1996, 1997 and 1998 are due from Transfer U/s. 205C of Company’sAct, 1956. The company has received several complaints for revalidation of dividend cheques but in absenceof banker’s cheque and details of unclaimed dividend, management is unable to solve their complaints.

33. Company is preparing for filing Income tax Return and Sales Tax Returns for the all pending years shortlyand till that the company have not made provision for income tax and sales tax upto the FY 2012-13 inthe books of accounts.

34. Contingent liabilities not provided for in the books of accounts are as under:


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(i) The company has a various matter for different assessment year and pending with different forum ofsales tax authority. Total demand of Rs. 553.87 lacs for which the appeals are pending at various forumof sales tax department as details given below.

A.Y. Order Dt. Amount Forum where dispute is pending(Rs. In Lacs)

1997-98 14/07/03 245.92 Appeal pending with applet tribunal.1998-99 16/02/06 274.63 Matter reminded back to Assistant commissioner of sales tax

for fresh order.1999-00 31/03/05 24.30 Appeal pending with joint Commercial tax commissioner,

Appeal division 1 Ahmedabad.2000-01 08/12/05 6.14 Under reassessment order dtd. 08/12/2005 by commissioner of

Sales Tax. Appeal pending with Joint commercial tax commissionerAppeal division 1 Ahmedabad.

2000-01 05/03/05 2.88 Appeal pending with joint commercial tax commissioner appealdivision a Ahmedabad.

(i) Company has filed “VandhaArjee” against Municipal Tax and interest bills for several previous years.The matters are under litigation with authorities.

(ii) Details of Claims lodged against the company, not acknowledged as debts : Such amount is notascertainable by the company.

(iv) Liabilities on account of Suspension of Trading activities on Stock Exchange can not be quantified.35. The company has huge accumulated losses resulting into Deferred Tax Asset. As a prudent policy, the said

Deferred Tax Asset has not been recognised due to virtual uncertainties about realisation of profits in theforthcoming years in accordance with Accounting Standard-22.

36. Company’s Naroda division is closed since long time. Company has provided depreciation of Rs. 2.95 lacsdue to normal wear and tear for assets.

37. Earnings per share (EPS)Sr. Particulars Year ended Year endedNo. 31st March, 2014 31st March, 20131 Net Profit [ loss ] (Rs. In Lacs) (-) 21.81 (-) 34.752 Weighted Average Number of Shares 18412440 184124403 Basic/ Diluted EPS (Rs.) (on nominal value of Rs. 10 per share ) (-) 0.12 (-) 0.19

38. In the opinion of the Board of Director the Current Assets, Loans and Advances are approximately of thevalue stated, if realized in normal courses of business.

39. Related Party transactions:

No. Nature of Relationship Name of Related Parties1. Associate Companies/Enterprise TJR Sons Pvt. Ltd.

Sun Retail Pvt. Ltd.TJR Finance Ltd.Kadam Exports Pvt. Ltd.Shakti Nutraceuticals Pvt. Ltd.Devika Proteins Ltd.

2 Key Management Person Dhiren K. ThakkarVinodchandra K. PandyaKiritbhai Chagganbhai PatelAditya Yogeshbhai PatelYogeshkumar Rajnikant Patel


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3 Relative of key management person Hitesh K ThakkarDevika H ThakkarGauri D. ThakkarJaysheel D. ThakkarMonika H. ThakkarNeela ThakkarGauri Thakkar

(II) List of Transactions entered with them :

No. Nature of Transactions Associate Joint Key Relatives Others TotalVenture Manage- of KMP

mentPersonnel

(KMP)1 LOANS TAKEN

Balance as at 1st April 16847520.00 0.00 4768332.00 7500000.00 0.00 29115852.00

Taken During the Year 491500.00 0.00 0.00 0.00 0.00 491500.00

Returned During the Year 12000.00 0.00 1500000.00 0.00 0.00 1512000.00

Balance as at 31st March 17327020.00 0.00 3268332.00 7500000.00 0.00 28095352.00

2 SUNDRY DEBTORS


Paid During The Year 253000.00 0.00 0.00 0.00 0.00 253000.00


3 LOANS/Advances


Advances Paid during the year 760000.00 0.00 0.00 0.00 0.00 760000.00

Advances Received During the year 760000.00 0.00 0.00 0.00 0.00 760000.00


4 SUNDRY CREDITORS


5 SALES 85349316.00 0.00 0.00 0.00 0.00 85349316.00

6 OTHER INCOME 0.00 0.00 0.00 0.00 0.00 0.00

7 PURCHASES 84987333.00 0.00 0.00 0.00 0.00 84987333.00

8 EXPENDITURE 0.00 0.00 0.00 0.00 0.00 0.00

9 RENT 0.00 0.00 0.00 0.00 0.00 0.00

10 SALARY 0.00 0.00 0.00 0.00 0.00 0.00

11 INTEREST 0.00 0.00 0.00 0.00 0.00 0.00

41. Wherever external evidence in the form of bills, invoice, debit notes, credit notes, etc are not made available,and Management have relied upon the internal vouchers prepared and authenticated by Directors/ Authorisedofficers of the company and entry passed in the accounts maintained by the company.

42. PAYMENT TO STATUTORY AUDITORS :CURRENT YEAR PREVIOUS YEAR

(a) Audit Fees[As Statutory Auditors] Rs.90000 Rs. 90000


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43. Computation of Net profit in accordance with section 349 of Companies Act, 1956 are not required as director’swere not paid commission during the year under audit.

44. Company has reduced its staff at the plant, division and Head Office. Company has engaged persons onretainer basis at Head office from March, 2003.Company has not provided for ESI Contribution.

Figures have been regrouped and rearranged wherever found necessary so as to make them comparable within the current year and Figures in the Balance Sheet are rounded off to the nearest of the rupee.

45. Management have broadly reviewed the basis of compiling details and information and made test checkedwherever considered necessary. The books and / or the details / information compiled in the company onthe computer.

46. Writing off debtors, Bad and Doubtful debts, investments, loans and advances are as per management’s decisionand opinion. Debtors/Creditors are accounted at the time of settlement of claims.

47. Contract remaining to executed on Capital Account not provided for Rs. Nil/- (Previous year Rs. Nil)

48. The company is operating only in one segment of trading of goods. Hence no separate Segment wise Accountingis required and given herewith.

49. Due to settlement dispute with debtor/creditor, advance given and advance taken we could not quantify closingbalance at the end of year as such balances have been arrived by unilateral actions. Amount of dispute cannotbe quantified. No fraud by company or on company has been initiated during the year.

50. NSC matured could not be encased as they are lying with sales tax department. Recoveries of such NSCare negligible. As per auditor these investment must be written off in absence of details.

51. We could not employ full time company secretary u/s.383A of Companies Act, 1956, due to non-availabilityof professional.

52. (a) CONSUMPTION OF RAW MATERIALS IN TERMS OF VALUE AND PERCENTAGE

SR. PARTICULARS 2013-14 2012-13Rupees in% Rupees in%

I Imported Nil Nil Nil NilII Indigenous Nil Nil Nil Nil

(b) CONSUMPTION OF STORSE AND SPARESIN TERMS OF VALUE AND PERCENTAGE :


I Imported Nil Nil Nil NilII Indigenous Nil Nil Nil Nil

(c) TRADING GOODS :


I Imported Nil Nil Nil NilII Indigenous 862.16 lacs 100 Nil Nil

53. Particulars of Power and fuel Cos.Sr. PARTICULARS 2013-14 2012-131 Rupees NIL NIL

54. CIF value of Imports

Sr. PARTICULARS 2013-14 2012-131. Rupees NIL NIL


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55. EXPENDITURE IN FOREIGN CURRENCY :

Sr. PARTICULARS 2013-14 2012-13

1. Rupees NIL NIL

56. Earning in Foreign Exchange :

Sr. PARTICULARS 2013-14 2012-13

1. Rupees NIL NIL

57. The information/details given in the Audit report are as per the books maintained and determined and informationare compiled and furnished on the computer.

58. Prior Period Expenditure :-Prior period expenditure / Incomehave been debited / Credited to the profit and loss account under the followingaccount heads :Included under the Head of Account 2013-14( Rs.)EXPENSES : NIL

The statements of significant accounting policies and the notes numbered 1 to 58 from an integral part ofthe year ended 31st March 2014

Signature to Schedule 1 to 58






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CASH FLOW STATEMENT, ANNEXURE TO BALANCE SHEETFOR THE YEAR ENDED ON 31-MAR-2014

(PERSUANT TO CLAUSE 32 OF THE LISTING AGREEMENT)In (Rupees)

Particulars 31-MAR-2014 31-MAR-2013

1. Profit before Tax and extraordinary Items 2180916 -3475296Adjustments for :(a) Depreciation 912135 1034793(b) Financial Charges 0 0(c) Interest Received 0 -1020831(d) Income from Kasar - Vatav & Other Income 0 2384499e) Bad debt provision 0 2384499OPERATING PROFIT (LOSS) BEFORE WORKING CAPITAL CHARGES 1296078 -1154297Adjustment for(a) Trade and Other Receivables -89703483 7618639(b) Inventories 0 0(c) Trade Payable & Other Liabilities 88866971 -3416220CASH GENERATED FROM OPERATION -2132590 3048122Income Tax Paid 0 0CASH FLOW BEFORE EXTRA ORDINARY ITEMS -2132590 3048122Extra Ordinary Items 0 -2384499Kasar Vatav account 0 1206976NET CASH FLOW FROM OPERATING ACTIVITIES - A -2132590 1870599

2. CASH FLOW FROM INVESTMENT ACTIVITIES :(a) Purchase of Fixed Assets 3703 0(b) Sale of Fixed Assets 0 0(c) Fresh Investment 0 0NET CASH USED FORM INVESTING ACTIVITIES - B 3703 0

3. CASH FLOW FROM FINANCIAL ACTIVITIES :(a) (Decrease) Increase in Long Term Borrowing (Net) 0 -142758(b) (Decrease) Increase in Unsecure Loan 479500 -482250(c) Interest Paid 0 0(d) Interest Received 27297 77462NET CASH USED IN INVESTMENT ACTITIVITES - C 506797 -547546

NET INCREASE (DECREAS) IN CASH (A+B+C) -1629496 1323053Opening Balance of Cash & Cash Equivalents 10901241 9578188Cloasing Balance of Cash & Cash Equivalents 9271745 10901241Note : 1. Figures for the previous year have been regrouped/restated wherever material.

2. All figures “ - “ indicates outflow.3. The above cash flow statement has been prepared under the Indirect Rs. Method Rs. as set out in

Accounting Standard 3 on Cash Flow statement” issued by the ICAI.4. The closing cash and cash equivalents as at 31-3-2014 of Rs.9271745 includes Rs.8930209 /- with

banks in no lien deposit accounts. Balance in no lien deposit accounts shall not be freely availablewith the bank.

As per my even report of the dateFor, SHAH DINESH DAHYALAL & ASSOCIATES For, Kanel Industries Ltd.CHARTERED ACCOUNTANTSDinesh D ShahProprietor Director DirectorM. No. 106871Firm Regi. No. 120362WDate : 31/05/2014 Date : 31/05/2014Place : Ahmedabad Place : Ahmedabad


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AUDITOR’S CERTIFICATE

To,Board of Directors,Kanel Industries Limited203, Abhijeet - 1,Nr. Mithakhali Six Roads,Ellisbridge,Ahmedabad - 6.

We have examined the above Cash Flow Statement of Kanel Industries Limited for the year ended on 31st March,2014.

The Statements has been prepared by the company in accordance with the requirements of the Listing Agreement’s[clauses 32 with] the stock exchange and is based on and is in agreement with the corresponding Profit & Lossaccount and Balance sheet of the company covered by report on 31st May, 2014 to the mambers of the company.

As per our report attached of even date,For Shah Dhiesh Dahyalal Shah & AssociateChartered Accountants

Dinesh D Shah(Proprietor)

Place : AhmedabadDate : 31.05.2014

ATTENDANCE SLIP

I Shri/Smt. ____________________________________ of ___________________being a member/ proxy of KanelIndustries Limited do hereby record my presence at the 22nd Annual General Meeting of the members of the Companyto be held on Monday the 29th September, 2014 at 10.00 A.M. at 203, Abhijeet-I, 2nd Floor, Mithakhali Six Roads,Ellisbridge, Ahmedabad- 380 006, Gujarat, India.

Name of Shareholder :__________________________________________________________

Ledger Folio No. :__________________________________________________________

D.P. NAME :__________________________________________________________

D.P. I.D. :__________________________________________________________

CLIENT I.D. :__________________________________________________________

Number of Shares Held :__________________________________________________________

Date :Place : ______________________________________________

(Signature of the Member/Proxy attending the meeting)

PROXY FORM

Name of Shareholder :__________________________________________________________

Ledger Folio No. :__________________________________________________________

D.P. NAME :__________________________________________________________

D.P. I.D. :__________________________________________________________

CLIENT I.D. :__________________________________________________________

Number of Shares Held :__________________________________________________________

I Shri/Smt. ________________________________ being a member of Kanel Industries Limited, holding _______ Sharesin the company do hereby appoint Shri _________________ of __________________ or failing him Shri__________________ of _____________________ or failing him Shri _____________________________ of_____________________ to remain present at the 22nd Annual General Meeting of the members of the Companyto be held on Monday the 29th September, 2014, at 10.00 A.M. at 203, Abhijeet-I, 2nd Floor, Mithakhali Six Roads,Ellisbridge, Ahmedabad- 380 006, Gujarat, India or at any adjournment thereof and to vote for and on my behalfif poll is granted

Date :Place : ______________________________________________

(Signature of the memberAppointing a Proxy)

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